China to buy $50 billion in U.S. farm products in return for tariff concessions-U.S. sources

[webfact]

China to buy $50 billion in U.S. farm products in return for tariff concessions-U.S. sources

By Jeff Mason, Andrea Shalal and David Lawder

 

FILE PHOTO: Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019. REUTERS/Aly Song

 

WASHINGTON (Reuters) - The White House has agreed to suspend some tariffs on Chinese goods and reduce others in return for Beijing's pledge to hike purchases of U.S. farm products in 2020, sources said on Thursday, taking a step towards de-escalating the trade war between the world's two biggest economies.

 

A sourced briefed on the status of bilateral negotiations said the United States would suspend tariffs on $160 billion in Chinese goods expected to go into effect on Dec. 15 and roll back existing tariffs.

 

In return, Beijing would agree to buy $50 billion in U.S. agricultural goods in 2020, double what it bought in 2017, before the trade conflict started, two U.S.-based sources briefed on the talks said.

 

The White House didn't release any official statement, raising questions about whether the terms had been agreed by both sides.

 

Two people familiar with the negotiations had said earlier on Thursday that U.S. negotiators were offering to cut existing tariffs on Chinese goods by as much as 50% as well as suspend the new tariffs scheduled to go into effect on Sunday in an attempt to secure a "Phase 1" deal first promised in October.

 

The White House has reached a "deal in principle" with Beijing to move forward with their "phase one" trade deal to resolve a 17-month trade war. Conway G. Gittens has the details.

 

The U.S.-China trade war has slowed global growth and dampened profits and investment for companies around the world. The United States has announced $28 billion in subsidies for American farmers affected by the dispute.

 

"If signed, this is an encouraging first phase that puts a floor under further deterioration of the bilateral relationship," said U.S.-China Business Council President Craig Allen. "But this is just the beginning. The issues facing the US and China are complex and multi-faceted. They are unlikely to all be resolved quickly."

 

China bought $24 billion in U.S. farm products in 2017, according to U.S. Department of Agriculture figures.

 

AN AG BUY TURNAROUND

Trump said in a White House news conference on Oct. 11 with Chinese Vice Premier Liu He that the two countries had agreed to a "Phase 1" trade deal on "intellectual property, financial services" and a "purchase of from $40 (billion) to $50 billion worth of agricultural products."

 

A written agreement would be available in weeks, Trump said at the time, adding, "we’ve agreed in principle to just about everything I mentioned, all of the different points."

 

Beijing has since balked at committing to buy a specific amount of agricultural goods during a certain time frame, however. Chinese officials said they would like the discretion to buy based on market conditions.

 

After the October news conference, analysts questioned https://www.reuters.com/article/us-usa-trade-china-agriculture/trumps-hailing-of-50-billion-in-chinese-farm-purchases-seen-as-meaningless-idUSKBN1WT0TG whether the $50 billion figure was realistic.

 

Soybeans made up half of China's agricultural purchases in 2017. Demand has since cratered because the pig herds that eat it have been decimated by African swine fever.

 

Chinese officials have demanded the United States roll back tariffs that Trump put in place as a condition of any "Phase 1" deal. The Trump administration has put tariffs on hundreds of billions of dollars in Chinese imports, starting in July 2018.

 

Although there appeared to be an agreement in principle, it was unclear whether it was a written, actionable deal, or whether Beijing had agreed to it, said one Washington-based source familiar with the talks.

 

"Until the full text is released, it's not particularly actionable. It's very unclear to me: Is this an agreement in principle or is it an agreement?" the source said.

 

LOOMING DEADLINE

If Trump does not suspend the tariffs scheduled to go into effect on Sunday, Beijing officials will apply more tariffs on U.S. goods and may suspend talks until after the U.S. presidential election in November 2020, trade experts believe.

 

The new tariffs would apply to almost $160 billion of Chinese imports such as video game consoles, computer monitors.

 

In August, China said it would impose 5% and 10% in additional tariffs on $75 billion of U.S. goods in two batches. Tariffs on the first batch kicked in on Sept. 1, hitting U.S. goods including soybeans, pork, beef, chemicals and crude oil.

 

The tariffs on the second batch of products are due to be activated on Dec. 15, affecting goods ranging from corn and wheat to small aircraft and rare earth magnets.

 

China also said it will reapply on Dec. 15 an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of 2019.

 

(Reporting by Jeff Mason, Andrea Shalal, David Lawder in Washington; Writing by Heather Timmons; Editing by Matthew Lewis and Sonya Hepinstall)

 

-- © Copyright Reuters 2019-12-13

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[Tug]

Good but sadly lo late for many farm families 

[Eric Loh]

The greatest self proclaimed deal maker is floundering and ceding to the Chinese. Whatever the outcome, it will take time for Chinese customers to be confident that an impulsive and erratic Trump may again throw another tantrum in future trade relationship. Trade don’t work well with uncertainty in mind. 

[HuskerDo]

15 minutes ago, Eric Loh said:

The greatest self proclaimed deal maker is floundering and ceding to the Chinese. Whatever the outcome, it will take time for Chinese customers to be confident that an impulsive and erratic Trump may again throw another tantrum in future trade relationship. Trade don’t work well with uncertainty in mind. 

Floundering and ceding? No, you meant to say he's "succeeding". No floundering either. Just protecting the folks that elected him. Sure the farmers had to wait a while for it  to get done but negotiations (real and good ones) take time. Trump delivered. Now on to phase 2.

 

 

[Thian]

China buying more from the US, does that mean they'll buy less from the Thai?

[Eric Loh]

18 minutes ago, HuskerDo said:

Floundering and ceding? No, you meant to say he's "succeeding". No floundering either. Just protecting the folks that elected him. Sure the farmers had to wait a while for it  to get done but negotiations (real and good ones) take time. Trump delivered. Now on to phase 2.

 

 

I will give you top marks for optimism and loyalty but low marks for reality and failure to understand the mind of the Chinese. The trade deal is far from being negotiated and devil in the details. The Chinese leaders and the citizens have a high tolerance threshold of pain and suffering while Trump has a clock to work on. Who you think will relent with such unfair disadvantage.
 

As to the sunshine patriots in the farming industries, will they be Trump stalwarts when they see their soybeans prices falling after having planted their crops last spring? Or the hog farmers see the big potential of exporting to China due to swine fever move to South America. 

 

Famous Sun Tzu quote ‘if your opponent is of choleric temper, seek to irritate him. Pretend to be weak that he may grow arrogant’ and I would add ‘grow impatient to close the deal. 

[riclag]

Promises kept, another excellent  deal for Americans

Thanks Mr. President

[HuskerDo]

14 minutes ago, Thian said:

China buying more from the US, does that mean they'll buy less from the Thai?

If Thailand plays its cards right (like Vietnam) they will be able to pick up the slack from any holes in what China is able to offer the US.

[simple1]

3 minutes ago, riclag said:

Promises kept, another excellent  deal for Americans

Thanks Mr. President

Where is the win? US AG sector has cost the US tax payer $28 billion in subsidies since the beginning of the Trade War, how many US jobs have been lost due to the Trade War? Plus untold billions in increased costs for retail domestic buyers. Plus currently no resolution for the primary points of contention.

[Eric Loh]

5 minutes ago, HuskerDo said:

"failure to understand the mind of the Chinese."..... I think they met their match in Trump!

 

"The Chinese leaders and the citizens have a high tolerance threshold of pain and suffering".... the leaders don't but I agree the citizens do. That's what communism has to offer its people.

 

"while Trump has a clock to work on".... yes, FIVE more years.

Your lack of understanding the Chinese in full display. Communism need the leaders to stress their interests of the community. The leaders filters their attitudes to the people. That’s the only possible way for communism to survive in China. 

 

While Trump is purely on his individual style and set of personal beliefs. This is the reason why he is in so trouble and creating for much chaos. He is a child without adult supervision. 

[Eric Loh]

11 minutes ago, HuskerDo said:

"how many US jobs have been lost due to the Trade War?"..... so far this year around 2 MILLION additional jobs added. Any more questions?

Those are nonfarm jobs which is still slower than 2018. The employment rate meanwhile ticked higher to 3.6%. Have you got a better stats that is a true reflection of the total economy?  

[zydeco]

Trump folded. I've been saying he would for over a year and a half. He is not only going to cancel 15 December tariffs but reduce by 50 percent those already in place. In return for what? The Chinese promise to buy 50 billion worth of beans (which Trump said they would do in October and they didn't), they promise to give access to their financial markets, and the promise, really, really, promise that this time, they'll try to do something about IP. Just like they've been promising for 30 years. No hardcore, built in monitoring that actually does something. Absolutely nothing about government subsidies to state owned enterprises. Utterly toothless. All the fat fool cares about is the stock market. And only complete and utter fools think this "deal" meant anything other than Trump's complete surrender. It would serve him right, if the Chinese decided not to do it. Then he would probably crawl on his fat gut to beg for anything he could get. Pathetic man.

[jvs]

1 hour ago, HuskerDo said:

Now on to phase 2.

The Wall?

[simple1]

Try answering the question...

• Moody's Analytics estimates that the Trump administration's trade war with China has resulted in 300,000 fewer jobs being created in the U.S.
• That figure could rise to 450,000 by year-end if the dispute continues, according to the economic research firm.

https://www.cbsnews.com/news/trumps-trade-war-squashed-an-estimated-300000-jobs-so-far-moodys-estimates/

[Sakeopete]

All the negativity towards Trump. Right or wrong at least he is doing something for his country. More than can be said about previous administrations that sat on their hands while China became an economic giant at America's expense. 

[Redline]

3 hours ago, zydeco said:

Trump folded. I've been saying he would for over a year and a half. He is not only going to cancel 15 December tariffs but reduce by 50 percent those already in place. In return for what? The Chinese promise to buy 50 billion worth of beans (which Trump said they would do in October and they didn't), they promise to give access to their financial markets, and the promise, really, really, promise that this time, they'll try to do something about IP. Just like they've been promising for 30 years. No hardcore, built in monitoring that actually does something. Absolutely nothing about government subsidies to state owned enterprises. Utterly toothless. All the fat fool cares about is the stock market. And only complete and utter fools think this "deal" meant anything other than Trump's complete surrender. It would serve him right, if the Chinese decided not to do it. Then he would probably crawl on his fat gut to beg for anything he could get. Pathetic man.

Just like he used Obama’s new NAFTA as well-it was already written-and the Democrats refined it-another big win.  And the  “Apple” factory in Austin that isn’t Apple, and open before he ran for president ????. The list goes on...

[Redline]

I’ll wait to hear the real news from Xi-Trump lies numerous times a day 

[Eric Loh]

18 minutes ago, Redline said:

I’ll wait to hear the real news from Xi-Trump lies numerous times a day 

Trump was so convinced of his lies that he is telling the farmers to buy bigger tractors as Beijing promises to buy more American agriculture products. Haven’t the farmers heard these lies before?

[TopDeadSenter]

While the left are wasting umpteen hours in a mad nonsensical bunfight in the house of representatives, Trump is working hard. This time muzzling the Chinese and doing miracles for the American producers and economy in general. The guy is an absolute hero. KAG2020 (it's in the bag!)

[zydeco]

1 hour ago, Sakeopete said:

All the negativity towards Trump. Right or wrong at least he is doing something for his country. More than can be said about previous administrations that sat on their hands while China became an economic giant at America's expense. 

He surrendered! He's waving a white flag. He's bragging about exporting soybeans and pork to China, while allowing China to run free with its state owned enterprises, IP theft, and own high tariffs. He's a coward. The US looks like a colony of China, exporting cheap raw materials and getting fabricated goods in return. We've become little better than Zimbabwe.

[zydeco]

57 minutes ago, Redline said:

Just like he used Obama’s new NAFTA as well-it was already written-and the Democrats refined it-another big win.  And the  “Apple” factory in Austin that isn’t Apple, and open before he ran for president ????. The list goes on...

Yea, a list of failure:

North Korea

Venezuela

The Wall

DACA

Immigration moratorium

5 percent reduction in the deficit (BIGGEST LAUGH OF ALL!)

Budget sequester (LOL)

Birthright Citizenship Executive Order

Mexican Cartels designated as terrorist Executive Order

On and on and on and on.

Failure.

And people praising him for his success.

[zydeco]

44 minutes ago, TopDeadSenter said:

While the left are wasting umpteen hours in a mad nonsensical bunfight in the house of representatives, Trump is working hard. This time muzzling the Chinese and doing miracles for the American producers and economy in general. The guy is an absolute hero. KAG2020 (it's in the bag!)

Hah! He sold pork and beans to China, a country whose hogholocaust means they're starving. And for this, he surrendered all his leverage. Just to pump the stock market. What you're giving us is BreitbartThink, where every failure is just more 3D chess and the goal posts keep moving. 

[IAMHERE]

Sounds too much like a bribe. POTUS, don't sign that deal or Polosi will get you.

[Paul Henry]

Will believe when it happens.Trump just lies and exaggerates every thing he see and hears.60% of Americans don't believe him why would the Chinese.The world just laughs at Trump and his forever bulls11t and child like behavior. In his case he is better off sitting there looking like an idiot rather than opening his mouth and removing all doubt. 

[zydeco]

The Farce of the Deal. Nothing to be in writing. Nothing to be made public. No signing ceremony. 

Quote

Here's what we do know: according to Fox Business correspondent Edwards Lawrence, China "verbally agreed to buy $50b in agriculture, but that will not be in writing." In fact it appears that nothing will be.   https://www.zerohedge.com/markets/art-secret-deal-terms-phase-1-deal-will-never-be-made-public

 

[Redline]

2 hours ago, Eric Loh said:

Trump was so convinced of his lies that he is telling the farmers to buy bigger tractors as Beijing promises to buy more American agriculture products. Haven’t the farmers heard these lies before?

He’s acting like it’s a gift to the farmers ???? getting some of their business back

[zydeco]

There is no deal. Trump lied. Again.

[wwest5829]

6 hours ago, HuskerDo said:

"how many US jobs have been lost due to the Trade War?"..... so far this year around 2 MILLION additional jobs added. Any more questions?

Oh, good. No damage due to the trade wars. I was so confused by the facts.

[wwest5829]

3 hours ago, Sakeopete said:

All the negativity towards Trump. Right or wrong at least he is doing something for his country. More than can be said about previous administrations that sat on their hands while China became an economic giant at America's expense. 

Great international trade philosophy. Do something ... even its wrong.

[spidermike007]

The man who cannot negotiate his way out of a paper bag, has agreed to end the trade war with China, over an agreement to buy a measly $25 billion in additional agricultural products from the US? I knew this would end badly. Trump is caving, as he is pathologically fearful of losing the election in 2020. Xi got over on him, as did Kim, Putin, MBS, and nearly everyone else he has attempted to negotiate a deal with. He is a two bit deal maker, who is fairly adept at doing a deal on a 15 unit apartment building, or selling condos to Russian gangsters. Anything else, and he is in way over his head. Many of us knew he would get his butt kicked by China. But who thought is would be this gruesome?