China ties agriculture binge to Donald Trump reducing retaliatory tariffs

BEIJING: China will struggle to buy $50 billion of US farm goods annually unless it removes retaliatory tariffs on American products, and doing so would require reciprocal action by President Donald Trump, people familiar with the matter said.

Beijing is willing to start purchasing more US agricultural products as part of the “phase one” trade deal, but it is not likely to reach the $40 billion to $50 billion touted by Trump under current circumstances, the people said. The people asked not to be identified discussing the private negotiations.

The condition highlights how far apart Washington and Beijing remain, even after reaching the handshake accord touted by the US last week. Washington had said China, which imported about $20 billion of US farm goods in 2017, agreed to make large agricultural purchases in exchange for relief on upcoming tariffs.


Beijing’s position makes a deal more complex than initially described.

US equity futures pared gains on the news and the yen extended an advance, as investor optimism waned about prospects for a trade deal between the world’s two largest economies.

Under the terms of the partial trade arrangement, Chinese spending on US farm goods will scale to an annual figure of $40 billion to $50 billion over two years, Treasury Secretary Steven Mnuchin said earlier.

Beijing has in the past granted waivers so that its companies can buy US farm goods without paying Chinese tariffs. It could do that again to get purchases started, the people said. However, waivers are seen as being impractical for volumes as large as $50 billion a year, one of the people said.