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A farmer plants soybeans in Springfield, Nebraska. Photo: AP

China suspends purchases of US farm products in retaliation for ‘serious violation’ of trade deal between Xi Jinping and Donald Trump

  • Trump’s levying of new 10 per cent tariff on Chinese imports was ‘a serious violation of the consensus of the heads of state’, China’s official news agency says
  • US must ‘have the confidence to implement the commitments to create the necessary conditions for cooperation in the agricultural fields’, report says

China announced on Tuesday that it has suspended purchases of US agricultural products in retaliation for a “serious violation” of agreements between its President Xi Jinping and his counterpart Donald Trump.

Trump’s announcement last week that the US would put a new 10 per cent tariff on US$300 billion worth of imports from China was “a serious violation of the consensus of the heads of state of the two countries”, state news agency Xinhua said in a report issued soon after midnight.

China “has not ruled out import tariffs on US agricultural products purchased after August 3, and related Chinese companies have suspended purchasing US agricultural products,” Xinhua said.

“It is hoped that the US will conscientiously implement the consensus reached at the meeting between the heads of state of China and the United States, and have the confidence to implement the commitments to create the necessary conditions for cooperation in the agricultural fields between the two countries,” the report added.

US President Donald Trump and China's president, Xi Jinping, at the G20 leaders summit in Osaka, Japan on June 29. Photo: Reuters

After the two presidents held a summit during the G20 in Osaka, Japan in June, Xinhua reported that the two leaders had agreed to resume economic and trade negotiations, and that the US said it would not impose any new tariffs on Chinese products.

Trump told reporters after the meeting that: “We’re holding back on tariffs and they’re going to buy farm products”, adding that his meeting with Xi was “far better than expected”.

Negotiations since the June meeting – including high-level talks in Shanghai last week between Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin – failed to produce any breakthrough concessions, prompting Trump to announce the new tariffs shortly after the US officials returned to Washington.

Trump cited a lack of agricultural purchases and a failure to take measures that would stem the flow of the synthetic opioid fentanyl to the US to justify his latest move in the trade war.

“China’s announcement that it will not buy any agricultural products from the United States is a body blow to thousands of farmers and ranchers who are already struggling to get by,” American Farm Bureau Federation President Zippy Duvall said in a statement issued after news of China’s retaliatory measures.

Duvall said US agricultural exports to China were down by US$1.3 billion during the first half of the year, and that farmers now face the loss of what was a US$9.1 billion market in 2018. These exports were pegged at US$19.5 billion in 2017.

“In the last 18 months alone, farm and ranch families have dealt with plunging commodity prices, awful weather and tariffs higher than we have seen in decades. We urge negotiators to redouble their efforts to arrive at an agreement, and quickly.”

China disputes Trump claim over US farm product purchases

As of July 25, the US exported 10.1 million tonnes of soybeans to China in the current marketing year, which ends on August 31, down from 27.5 million tonnes at the same time a year ago, according to US Department of Agriculture data.

Beijing targeted American soybeans – the largest US agricultural commodity export to China in terms of value –in the first round of tariffs after Trump imposed punitive duties on Chinese goods in July last year and buyers there turned increasingly to Brazilian suppliers.

A farmer plants soybeans in a field in Springfield, Nebraska. Photo: AP

The value of China’s US soybean imports fell by three-quarters in 2018 to US$3.13 billion from US$12.23 billion in 2017, according to US Census Bureau data.

Michelle Erickson-Jones, a farmer based in south central Montana who raises wheat, corn and safflower, agreed that the latest twist in the US-China trade war would be difficult for farmers, who had become reliant on Chinese demand.

“This has significant implications for soybeans as well as the hog industry or anything we ship over to China,” said Erickson-Jones, a fourth generation family farmer. “We’re definitely seeing a pretty significant escalation in our trade dispute in the past few days,” she added.

State media had been talking up the Chinese government’s efforts to boost US agricultural imports before Lighthizer and Mnuchin’s visit to Shanghai, and shifted to a strong defence of its record after Trump’s latest tariff move.

China’s ‘weaponised’ yuan creates gloomy outlook for US trade talks

Cong Liang, secretary general of China’s powerful economic planning agency, the National Development and Reform Commission, was quoted by the official Xinhua news agency on Monday as saying that the accusation China was not buying enough US farm products “lacked factual basis”.

Cong said China had been sincere in purchasing US farm products, especially since the summit between Presidents Trump and Xi in Osaka at the end of June, and that any shortfall in Washington’s expectations was for market reasons, not political considerations.

Additional reporting by Mark Magnier in Washington and Zhou Xin in Beijing.

This article appeared in the South China Morning Post print edition as: china halts purchases of u.s. farm productsChina halts purchases of US agricultural products
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