Trump announces trade deal with China involving $40-$50 billion in ag exports
|President Donald Trump today announced the United States had reached “phase one” of a trade deal with China that will include China purchasing between $40 billion and $50 billion in U.S. agricultural products.Trump agreed to delay imposition of the increased tariffs on Chinese products he had planned for Tuesday, but the agreement did not address the major issues that Trump has raised on Chinese business practices.At a press conference with Trump, Chinese Vice Premier Liu He released a short letter from Chinese President Xi Jinping which said XI attaches “great importance” to Trump’s concerns about agricultural products.The letter also noted that Chinese companies had recently increased purchases of soybeans and pork and said Xi expects the two countries to reach progress on concerns of both leaders.“We have come to a deal, pretty much, subject to getting it written,” Trump said. “It’ll take probably three weeks, four weeks, or five weeks.”Noting that he and President Xi Jinping would be together at a summit in Chile, he added, “And maybe it’ll be then, or maybe it’ll be sometime around then.”Although no details were announced, Trump said, “But we’ve come to a deal on intellectual property, financial services. A tremendous deal for the farmers. A purchase of — from 40 to 50 billion dollars’ worth of agricultural products.”“To show you how big that is, that would be two and a half, three times what China had purchased at its highest point thus far. So, they were purchasing $16 or $17 billion at the highest point, and that’ll be brought up to $40 billion to $50 billion. So I’d suggest the farmers have to go and immediately buy more land and get bigger tractors. They’ll be available at John Deere and a lot of other great distributors.“But we’re taking the purchase of agricultural products from $40 to $50 billion, meaning in that neighborhood — from 40 to 50, approximately, billion. And what they’ve been doing now, I believe, is about $8 billion, right? Eight — right now it’s eight.“The other thing I will say is, over the last two weeks, a lot of purchases have started going back to our farmers. And you’ve been doing a lot of business with us, which we appreciate very much.“But it really started a few weeks ago, but they intend to go up, ultimately, once the agreement is signed, from $40 to $50 billion. And, really, from — that was from a base of probably $16 billion, and right now it’s $8 billion. And the $8 billion was lower than $8 billion. They got up to $8 billion because they’ve been purchasing quite a bit over the last couple of weeks.“So, we also have the agricultural structural issues. We have some incredible progress on the structure and structural issues.”Trade Representative Robert Lighthizer added, ”I would say probably at least as important as the purchases is the fact that we’ve corrected a variety of SPS —what we call sanitary and phytosanitary issues.“And we’ve corrected biotechnology issues. And it will be — it will be much easier now for American farmers to be able to ship to China. And we’ve made some corrections on our side to — that will help them on the Chinese side.”|
Kevin Cramer, R-N.D., said, “Congratulations to President Trump on securing this agreement. Phase 1 — which includes lowered tariffs and large purchases of agricultural products — paves the way for significant, long-term agreements between our countries.”“President Trump called me this morning to assure me this deal will be very good for agriculture,” Cramer said. “This is excellent news, and I look forward to reviewing the specifics and continuing to work with the president to ensure the next phases benefit American agriculture.”But most reactions to the announcement were more cautious.
Sen. John Hoeven, R-N.D.Senate Agriculture Appropriations Subcommittee Chairman John Hoeven, R-N.D. — “Today’s phase one agreement with China, which includes Chinese purchases of $40-50 billion in U.S. agriculture goods, is welcome news for our farmers and ranchers. We appreciate the president’s efforts to secure phase one of the trade deal, as well as agreements with Japan and the EU. We encourage the administration to continue advancing trade negotiations with China.”
Sen. Chuck Grassley, R-IowaSenate Finance Committee Chairman Chuck Grassley, R-Iowa — “Any time progress is made, that’s good news. Farmers in Iowa know far too well that the trade war has caused real financial pain in the heartland. But we need to know more about this deal and follow-through from China will be key.”“I welcome the news that progress on some areas has led to a delay in tariff hikes that would impact U.S. consumers, and that President Trump plans to meet President Xi at the APEC Summit in Chile next month,” Grassley said.“A final deal must address the full scope of structural issues identified in USTR’s Section 301 report and include strong enforcement mechanisms. After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China. I look forward to learning more details in the coming days.”
Brian Kuehl, co-executive director of Farmers for Free Trade, the bipartisan coalition supported by the American Farm Bureau Federation and commodity groups — “While we are pleased that tariffs aren’t going up, this agreement seemingly does nothing to address the crippling tariffs farmers currently face.”“The promise of additional ag purchases is welcome news but details on timeline, price, commodities and many other questions will have to be answered. While the stock market may celebrate, farmers in Wisconsin, Minnesota, Texas and elsewhere will still wake up facing double-digit tariffs into one of America’s largest export markets.“Long-term, sustainable markets are what farmers actually need,” Kuehl said. “From the very beginning of the trade war, farmers have been promised that their patience would be rewarded. To date, the deal they’ve been promised has not come. Today’s news is a break in the clouds, but tariffs continue to cast a pall over the futures of farmers, ranchers and rural America. We hope both sides build on this progress to finally end the trade war.”
Roger Johnson, president of the Democratic-leaning National Farmers Union — “While we are glad to see a détente in this seemingly endless trade war, the tangible benefits to American family farmers and ranchers are unclear.”“There are many questions that still need to be answered: What will these agreed to policy reforms look like? How will they be enforced? And over what time frame will the $50 billion of agricultural purchases — an amount that is double our peak annual farm exports to China — take place?“Regardless of the answers to these questions, this deal should not be the end of our efforts to address China’s transgressions,” Johnson said. “Their unfair and manipulative trade practices are clearly still a problem that need to be fixed through substantive and meaningful reforms. Moving forward, the administration should work with our friends and allies to determine what those reforms should look like.”