US-China trade talks stall over farm goods purchase pledge
China pushes back against commitment that would be ‘hard to digest’
Talks to end the trade war between the US and China are sticking over China’s reluctance to buy billions of extra dollars of US farm produce regardless of demand, according to sources close to the negotiations.
President Trump has publicly insisted that the Chinese could buy double the amount it did before the trade war started. That would amount to $50bn (£38.8bn, €45bn) of annual sales.
But while the US continues to push for this commitment, one Chinese official told Reuters that buyers needed to be able to purchase agricultural products based on market conditions, rather than risk flooding the local economy with inappropriate goods.
“China does not want to buy a lot of products that people here don’t need or to buy something at a time when it is not in demand,” the official said.
If farm products “enter China in a concentrated way, it might be hard for the domestic market to digest”.
Beijing has stated that it is prepared to buy more from US farmers but not in a way that threatens natural laws of supply and demand. A Chinese commerce industry spokesman said earlier this month that China would “increase US farm purchases based on domestic demand and market principles, while the US would provide favourable conditions.”
Chinese agricultural buyers include both private and state players, and recently China has signalled its intention to buy from the most economical source by purchasing large amounts of soybeans from Brazil after a spike in the price of American beans.
Rumours of a delay in the signing of a US-China trade deal has already spooked markets, with oil prices dipping in early trading after one Trump administration official said that, while the goal of negotiations was still to have a deal ready to sign in November, “sometimes texts aren’t ready.”