Tag Archives: China

China’s President will meet with U.S. trade leaders Friday as the U.S. and China seek a trade deal before an early March deadline. The South China Morning Post reports China’s President Xi Jinping is scheduled to meet with a U.S. trade delegation in Beijing, which includes U.S. Trade Representative Robert Lighthizer.

China and the U.S. face an early March deadline set by the Trump administration to reach an agreement that could end the tit-for-tat trade war between the two nations. However, President Trump said this week he is open to extending the deadline, saying he could let the deadline “slide for a little while.” Trump is expected to meet with China’s President sometime in March in what some say could be a move to close an agreement between China and the United States.

The trade war served a blow to U.S. agriculture as China slapped retaliatory tariffs on U.S. farm commodities, most notably, soybeans and pork.

BEIJING (AP) — China has reported a new outbreak of African swine fever that is threating the country’s vital pork industry.

The Ministry of Agriculture and Rural Affairs reported Friday the disease had been detected on a farm in Yongzhou in the central province of Hunan, where 4,600 pigs were being raised.

Although just 171 of the pigs had died and 270 were found sick, ministry regulations require all pigs on an affected farm must be culled and disposed of and the area quarantined and decontaminated.

First detected in August, the disease has killed more than 1 million pigs in China, prompting restrictions on shipments of most of China’s 700 million swine, even healthy ones.

That has disrupted supplies of pork, China’s staple meat, to big cities while prices collapsed in areas with an oversupply of pigs that farmers are barred from shipping to other provinces. It also resulted in additional stress on pig farmers already beset by rising feed costs from Beijing’s tariff fight with President Donald Trump.

African swine fever doesn’t affect humans but is highly contagious in pigs.

Dozens of cases have been detected over recent months in at least 20 provinces.

It wasn’t clear how the virus reached China, but it was found to be genetically similar to versions in Russia, Poland and Georgia.

The outbreak could cause longer-term disruption if farmers respond to lower prices and higher costs by raising fewer pigs, leading to shortages and higher prices.

The government maintains stocks of frozen pork in case of shortages but has yet to say whether any will be released this year.

The American Soybean Association says trade talks are good, soybean purchases are good, but lifting the tariff that China slapped on U.S. soybean imports would be better.

The ASA says it’s the only way U.S. soybean producers can regain commercial access to China, their most significant overseas market. “It’s encouraging that the administration is keeping soybeans in their trade conversations with China,” says Davie Stephens, ASA President. “The Chinese Vice Premiere’s commitment to buy another five million tons of soybeans is encouraging, but it’s not the answer. We need an agreement at the end of the 90-day period that specifically rescinds the tariff that China has imposed on U.S. soybean imports.”

The ASA president says the “good-faith” purchase commitment is a positive sign that both countries are working towards the real progress that soybean producers are looking for. However, the purchases don’t offset the damage done to the soybean industry since tariffs were imposed. It also doesn’t repair the long-term damage the tariffs have done to a relationship that was decades in the making. ASA is joining other organizations in asking congressional members to help strengthen their message to the Administration that rescinding the tariffs are vital to the health of the farm economy.

WASHINGTON (AP) — Soybeans account for less than 1 percent of all the goods and services the United States sells the rest of the world.

But somehow the humble legumes are upstaging weightier, thornier issues as the Trump administration tackles trade disputes with China, the European Union and other trading partners. Critics worry that focusing on getting foreigners to buy soybeans and other U.S. goods is a distraction from the push them to make deeper economic reforms that would offer longer-lasting benefits to the United States.

The outsize importance of soybeans — mostly used as animal feed but also consumed by humans in everything from General Tso’s Tofu to soy lattes — was apparent again recently in two days of U.S.-China trade talks.

The world’s two biggest economies didn’t make much progress on their differences over the aggressive tactics — including cybertheft — that Beijing is allegedly using to challenge U.S. supremacy in cutting-edge industries like driverless cars and artificial intelligence.

But to the president’s delight, they did agree on one thing: In an unexpected deal that even surprised the top U.S. trade negotiator, China said that it would buy 5 million metric tons of American soybeans over an unspecified period.

“China as a sign of goodwill has agreed to purchase a tremendous, massive amount of soybeans,” Trump told reporters.

He said he had consulted with Agriculture Secretary Sonny Perdue and learned that “our farmers are extremely happy.”

“It’s a nice kind of olive branch,” said Peter Meyer, head of grain and oilseed analytics at S&P Global Platts.

Soybeans, which accounted for just $21.5 billion of $2.4 trillion in U.S. exports in 2017, seem to be punching above their weight in U.S. trade policy.

Farming is one of the few areas in which the United States sells more to the rest of the world than it buys, China included. Powerful lobbies represent American agricultural interests in Washington. And farmers tend to be enthusiastic Trump supporters.

The emphasis on soybeans has drawbacks, critics say. In the confrontation with China, for example, it diverts attention from the tough tech issues that divide the world’s two biggest economies and may decide whether Beijing or Washington presides over the economy of the future. And it implies that the Chinese might be able to avoid substantive concessions on their economic policies simply by agreeing to buy more American stuff and putting a dent in the massive U.S. trade deficit with China. That amounted to $336 billion in 2017 and was likely higher last year.

“There’s confusion about what the administration’s objectives are,” said Rufus Yerxa, president of the National Foreign Trade Council and a former U.S. trade official.

In a letter last week, Senate Minority Leader Chuck Schumer of New York and fellow Democratic Sens. Ron Wyden of Oregon and Sherrod Brown of Ohio warned Treasury Secretary Steven Mnuchin that any deal with China should force Beijing to end the abusive practices that put U.S. tech firms at a competitive disadvantage and to enact fundamental economic reforms that would make the Chinese market more accessible to U.S. and other foreign firms.

An agreement that settles for Chinese purchases of American goods, intended to narrow the trade deficit, would be viewed on Capitol Hill as “an abject failure,” they wrote.

Soybeans have taken a prominent place in previous Trump administration trade talks. The United States and the European Union at least temporarily backed away from a potential trade war over cars last July when the Europeans agreed, among other things, to load up on American soybeans.

America’s trading partners are well aware of the outsize influence farmers enjoy in Washington. When Trump last year started slapping import taxes on Chinese goods and on foreign steel and aluminum, they targeted their retaliation on the American Heartland, imposing tariffs on soybeans and other farm products.

China’s soybean tariffs had a devastating effect. Before the trade hostilities erupted last year, China bought nearly 60 percent of the soybeans the United States exported. Then the tariffs kicked in: In the first 10 months of 2018, U.S. soybean exports to China dropped to 8.2 million metric tons from 21.4 million metric tons a year earlier — a 62 percent freefall, according to the U.S. Department of Agriculture.

The backlog of unsold soybeans also pushed down U.S. prices, spreading more pain in farm country.

“We need some good news,” said Blake Hurst, a soybean and corn farmer in northwestern Missouri’s Atchison County and president of the Missouri Farm Bureau.

So Hurst and other farmers welcomed China’s decision to buy American beans. But their relief is limited. Hurst worries it’s a one-time purchase and not the resumption of business as usual.

China bought 31.7 million metric tons of American soybeans in 2017 and 36.1 million in 2016. Five million metric tons doesn’t do much to fill the gap.

“It’s still woefully short of what they used to do,” said Ron Moore, who grows corn and soybeans in Roseville, Illinois and serves as chairman of the American Soybean Association. “We’re not there yet.”

Even after U.S.-China trade tensions ease, soybean industry consultant John Baize said it might be a good idea for the U.S. and China to scale back their soybean trade. The economic and geopolitical rivals are likely clash again over issues such as trade, Taiwan and Chinese territorial claims in the South China Sea. Soybeans could once again be held hostage.

So Baize says the U.S. should sell more to other markets — such as Southeast Asia, Pakistan and Egypt — where demand for soybeans is growing as people earn more money and eat more meat, increasing the need for animal feed. Meanwhile, China should buy more from alternative suppliers like Brazil that probably aren’t potential adversaries, he said.

“We will wind up with more reliable customers, and they will wind up with less-disruptable suppliers,” he said.

China continues to purchase U.S. soybeans with a more than one million metric ton buy on Friday, and another 600,000 metric ton purchase reported Monday.

Following a round of trade talks last week, China pledged to purchase another five million metric tons of U.S. soybeans. Friday’s purchases by state-owned firms were believed to be destined for China’s state reserves, and thus immune from high import tariffs, according to Reuters.

The 25 percent tariffs, imposed last summer in retaliation for U.S. tariffs on Chinese goods, remain in place for U.S. soy imports by commercial crushers in China. With ongoing trade talks, China began purchasing U.S. soybeans at the end of December. China halted the purchases of U.S. soybeans when the tariff was put in place and purchased most of its needed supply from Brazil. Trade talks between China and the U.S. have a March 1 deadline.

Another province in China is now infected with African Swine Fever. A Pork Checkoff report says there are now 24 distinct areas in China that have tested positive for the disease.

China is requiring their slaughterhouses to run testing for the virus on pig products before they’re allowed to sell them to market. Slaughterhouses must slaughter pigs from different areas separately. They can only sell products if the blood from the same batch of pigs’ test negative for the ASF virus. A new regulation will go into effect on February 1st requiring slaughterhouses to suspend operations and disinfect their facilities if they get a positive test.

Officials in Taiwan reported that one dead pig found on the shore of its Kinmen Island has tested positive for ASF. They believe the animal was dumped on the beach in mainland China and washed ashore in Taiwan. The island nation is taking precautions to protect itself from ASF, including tighter security on all incoming boats and planes from the Chinese mainland. In Europe, officials in France have begun to cull wild boar populations near the border with Belgium in an attempt to keep the virus from spreading out of wild hog populations within Belgium.

The United States and China gave no indication of their next step after wrapping up talks aimed at resolving a tariff fight that threatens to chill global growth.

The two sides will “maintain close contact,” China’s Ministry of Commerce said Thursday. But they announced no agreements or date for meeting again during the 90-day truce declared on Dec. 1 by Presidents Donald Trump and Xi Jinping in their fight over Beijing’s technology ambitions.

That uncertainty dampened Asian investor sentiment. Stock markets in Germany, France, Japan and China fell back after rising Wednesday following Trump’s comment on Twitter that the talks were “going well!”

Negotiators focused on China’s pledge to buy a “substantial amount” of agricultural, energy, manufactured goods and other products and services, the U.S. Trade Representative said.

However, a USTR statement emphasized American insistence on “structural changes” in Chinese technology policy, market access, protection of foreign patents and copyrights and cyber theft of trade secrets. It gave no sign of progress in those areas.

It also said the negotiations dealt with the need for “ongoing verification and effective enforcement.” That reflects American frustration that the Chinese have failed to live up to past commitments.

A Ministry of Commerce spokesman, Gao Feng, said the talks “enhanced mutual understanding and laid the foundation for addressing each other’s concerns.”

Trump hiked tariffs on $250 billion of Chinese goods over complaints Beijing steals or pressures companies to hand over technology.

Washington also wants changes in an array of areas including the ruling Communist Party’s initiatives for government-led creation of global competitors in robotics, artificial intelligence and other industries.

American leaders worry those plans might erode U.S. industrial leadership. Chinese leaders see them as a path to prosperity and global influence and are reluctant to abandon them.

The two sides might be moving toward a “narrow agreement,” but “U.S. trade hawks” want to “limit the scope of that agreement and keep the pressure up on Beijing,” Eurasia Group analysts Michael Hirson, Jeffrey Wright and Paul Triolo said in a report.

“The risk of talks breaking down remains significant,” they wrote.

White House press secretary Sarah Huckabee Sanders expressed optimism to Fox Business Network. She said Wednesday the timing was unclear but the two sides are moving toward “more balanced and reciprocal” trade.

Beijing has tried to mollify Washington and other trading partners by promising to buy more of their goods and open its industries wider to foreign competitors.

Trump has complained repeatedly about the U.S. trade deficit with China, which last year likely exceeded the 2017 gap of $336 billion.

Economists say the 90-day window is too short to resolve all the conflicts between the biggest and second-biggest global economies.

“We can confidently say that enough progress was made that the discussions will continue at a higher level,” said Craig Allen, president of the U.S.-China Business Council. “That is very positive.”

Chinese exports to the U.S. have held up despite tariff increases, partly due to exporters rushing to fill orders before more increases hit. Forecasters expect American orders to slump this year.

China has imposed penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

U.S. companies want action on Chinese policies they complain improperly favor local companies. Those include subsidies and other favors for high-tech and state-owned industry, rules on technology licensing and preferential treatment of domestic suppliers in government procurement.

For its part, Beijing is unhappy with U.S. export curbs on “dual use” technology with possible military applications. Chinese officials say their companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

This week’s talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions against Iran.

China and the United States will continue their vice ministerial-level trade talks in Beijing for a third day on Wednesday, a U.S. official said, as financial market players closely watch the outlook for the trade dispute between the world’s two major powers.

The official was speaking to reporters late Tuesday following two days of talks in which Washington is believed to have called on Beijing to implement measures to protect intellectual property rights and increase imports of U.S. products.

Details of the talks were not immediately available, but U.S. President Donald said in a Twitter post, “Talks with China are going very well!”

The direct dialogue on trade between the world’s two largest economies came around one month after Chinese President Xi Jinping and Trump held a summit.

At their meeting on Dec. 1 in Buenos Aires, Xi and Trump agreed that the United States and China will hold off on imposing further tariffs on each other’s imports and try to complete talks on technology and intellectual property rights issues within 90 days.

The Trump administration warned at the time that “if at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent,” suggesting that a failure to finish negotiations will rekindle trade strains.

Amid escalating U.S.-China trade tensions, global stock markets have recently become shaky and concern has been mounting that the world economy would be weighed down by a slowdown of the Chinese and U.S. economies.

Beijing and Washington hope the latest talks will pave the way for a ministerial-level meeting that U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, Xi’s economic adviser, will attend, sources close to the matter said.

The United States has so far imposed tariffs of up to 25 percent on $250 billion of Chinese imports, with Trump urging Beijing to curb its huge trade surplus with the United States and improve the country’s alleged unfair business practices.

In retaliation, China has levied tariffs on more than 80 percent of all U.S. imports.

The second day of the vice ministerial-level trade talks coincided with North Korean leader Kim Jong Un’s unexpected arrival in Beijing on Tuesday.

Chinese Foreign Ministry spokesman Lu Kang told reporters later in the day that the holding of the two diplomatic events on the same day was unintentional.

In another sign of progress, China’s farm ministry has newly approved the import of five genetically modified crops, local media said on Tuesday, with the United States putting pressure on the Asian nation to open up its agricultural market further.

Trade talks between the U.S. and China this week should provide an early indication as to what political tensions between the two nations may disrupt the talks.

Deputy U.S. Trade Representative Jeff Gerrish will meet with Chinese officials in Beijing to begin discussing measures the U.S. seeks to allow the current trade war end between the two. If the talks are favorable to the U.S., Politico reports that could lead to higher level talks with higher ranking officials. The U.S. has set a March deadline for China to agree to trade policy reforms.

Meanwhile, China is opening access to its economy back to the United States through purchases of U.S. agricultural products. The state of the Chinese economy is seen as dire by some analysts, which could be a motivation to seek an end to the trade war. However, it remains unclear what specific demands the Trump administration will make and if China deems them reasonable or not.