In Latest Trade-War Salvo, China Halts ‘Goodwill’ Soybean Purchases
The money from President Trump’s second farm bailout can’t be disbursed quickly enough.
Trump’s farm-state supporters have already been struggling with a dip in agriculture exports to China, which has exacerbated the low commodity prices that have pushed thousands of American farmers to the brink of bankruptcy. America’s farmers are extremely vulnerable right now, which is probably why Beijing has opted for this latest precision strike in the trade conflict: Bloomberg reports that China’s largest state-run grain buyers have been instructed to halt the ‘goodwill’ purchases of American soybeans as Beijing ratchets up the pressure on the White House, which could soon approve new tariffs on $300 billion of Chinese imports.
Thanks to February’s pledge to buy another 10 million tons of American soybeans, sales to Chinese grain buyers by American soybean farmers started to recover during the opening months of 2019. Since President Trump and Xi called the trade-war truce back in December, China has bought some 13 million tons of soybeans from American farmers. Data from the Department of Agriculture show that China’s grain buyers have yet to take delivery on about 7 million tons of US soybeans that it has committed to buying.
The timing of Beijing’s latest blow is notable: Friday marked the conclusion of a two-week tariff ‘grace period’ (since the higher rates didn’t apply to goods already in transit, analysts speculated that the two sides would have roughly two weeks to find a resolution before the new levies were actually imposed), which suggests that more retaliation from Beijing could be in the offing.
Last night, Washington imposed preliminary anti-dumping tariffs on Chinese mattresses and beer kegs (the keg tariffs will also impact Mexico and Germany), though a final decision isn’t expected until October.
As it ratchets up the pressure on the administration with one hand, Beijing is trying appeal to potentially sympathetic voices with the other by reportedly asking state media organizations to soften their criticism of the US in the hopes of keeping open the possibility that tensions with Washington could ease.
“We have been told not to use ‘the US side’ generally in our copy because there are many different voices within the US,” one unidentified official reportedly told the SCMP.
At the same time, Beijing is keeping up its threats about a possible rare earth export ban, much to the chagrin of the American defense and tech industries. Ministry of Commerce Spokesman Gao Feng said Thursday during a regular press briefing that China can’t accept its rare earth metals being used against itself, though it remains willing to meet other countries’ demands for the metals. Gao added that China will fight “until the end” if the US continues to escalate the trade fight, adding that China won’t tolerate US bullying.