The U.S. – China trade war is still ongoing but both countries resumed talks to reach a mutually beneficial agreement. You will recall that China stopped buying agricultural products from the United States a few months ago. Thanks to the resumption of the trade talks, Beijing began imports of these products. However, the country is importing far less than it used to.
Trump Urges Beijing to Increase Agricultural Purchases.
According to those present during the last trade talks, Trump is trying to get Beijing to commit to larger agricultural purchases. In response to the president’s requests, an executive at a Chinese-state owned company said that Beijing is being careful about its purchase of agricultural products from the United States because it doesn’t want to buy more products than necessary. The supply has to match the demand. In his words; “China is trying not to buy more agricultural products than its residents need or buy when there is no demand.”
Trump, on the other hand, is insisting that China buys at least $50 billion worth of agricultural products from the United States irrespective of the current demand. This is more than double the amount the country bought before the trade war started. Such a purchase will require state implementation and unless both countries reach a compromise soon, it may intensify the trade war.
A Chinese official said that importing such a significant amount of products at once will lead to losses because the domestic market may have difficulty digesting it. Already, the demand for soybeans in China has dropped significantly due to the massive outbreak of African swine fever that has affected several pig herds in the country. Note that soybean is China’s biggest import from the United States and a key feed for pigs. So, meeting Trump’s demand is unrealistic at this time.