China Resumes Imports of US Liquefied Gas and Soybeans After Trade War Truce
WASHINGTON, DC –December 5, 2018
At the G20 summit in Buenos Aires, President Trump and Chinese President XI Jinping agreed to suspend the trade war for ninety days. Before the first of March, Washington and Beijing intend to conclude a new trade agreement, otherwise the White House will once again raise tariffs.
Following the two-hour talks between the leaders of the two countries in Argentina, Washington promised not to raise tariffs on Chinese goods from 10 to 25% from the first of January. Beijing, in turn, agreed to purchase agricultural and industrial products from the US, as well as energy “for a significant amount,” in order to reduce the trade imbalance between the countries. It seems these arrangements have begun to be implemented.
Chinese officials have begun preparing to restart imports of US soybeans and liquefied natural gas, the first sign confirming Trump’s claims and those of the White House that China had agreed to start buying some US products “immediately.”
Chinese officials have been told to take necessary steps for the purchases, according to two officials with knowledge of the discussions. It wasn’t clear whether the preparations meant China would cut the retaliatory tariffs it imposed on those products or when the purchases would happen.
It is possible that Beijing could reimburse buyers for the tariffs they pay, as they have done for purchases for the state soybean reserve.
Chinese imports of American soybeans fell 95% in October compared to last year, damaging the prospects of Midwest farmers who are in the middle of harvest time. Even if the tariffs are lifted now, the US crop is becoming less competitive in the Chinese market as the harvest season approaches in South America.
America has probably already missed its best chance to sell soybeans to China, according to Cargill, one of the world’s biggest agriculture commodity traders.
US liquefied natural gas was also absent from China’s shopping list in October, following Beijing’s move in September to impose a retaliatory 10% tariff on US supplies.
Even so, Asia’s biggest gas consumer imported at least one US cargo in November, according to vessel-tracking data compiled by Bloomberg, and there’s another en route.
Heading into winter, Australia, Turkmenistan and Qatar were China’s top gas suppliers, according to customs.