Chinese officials have reportedly ordered major agricultural companies to pause purchases of some US farm goods, including soybeans. The move comes amid heightened tensions with Washington over Hong Kong.
According to media reports, China’s key importers of farm goods, COFCO and Sinograin, have been told to suspend purchases of US soybeans, pork and other goods. However, sources told Bloomberg that private companies haven’t been told to stop their imports.
US customs data showed that China purchased $3.1 billion of American agricultural products in the three months through March. According to Chinese data, those purchases totaled $5 billion.
China’s import order follows US President Donald Trump’s intention to strip Hong Kong of its trade and travel perks over Beijing’s new security law. On Friday, Trump also threatened sanctions against Chinese and Hong Kong officials.
The row could worsen the already strained relations between the world’s two largest economies. Trump has periodically threatened to call off the phase-one trade deal, which was inked by the sides in January.
Under the terms of the deal, Beijing has to buy an additional $200 billion of US goods over the next two years, including $50 billion of agricultural products. The US, for its part, has reduced tariffs on some Chinese goods, but maintained the duties on $375 billion worth of products.
Since starting to gradually reopen its economy after the virus-led lockdown, China had increased the pace of its imports, including a more than a one-million-ton cargo of American soybeans in just two weeks in May, and rare purchases of US soybean oil and ethanol.
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