China pledged on Saturday to immediately begin ramping up soybean purchases from the United States indicating that they would purchase at least 5 million tons from the United States after officials from the two countries met for two days in Washington for trade negotiations.

Those purchases will come on top of the approximately 5 million tons China has already purchased since a December meeting between President Trump and Xi Jinping.

While the amount is still just a fraction of the 30 million to 36 million tons that China typically buys from the United States in a year, the frequency of the purchases may give U.S. farmers some cheer.  It is also a sign that China may be willing to work toward ending trade hostilities between the two countries as President Trump pressures counterpart Xi Jinping to buy more American goods to close the current trade gap.

President Trump and Lighthizer stressed the talks were very productive and are expected to lead to an overall deal that ends the trade war.

“It really is a sign of good faith for China to buy that much of our soybeans…that they’ve just committed to us prior to the signing of the deal,” President Trump said from the Oval Office, flanked by Vice Premier Liu He; U.S. Trade Representative Robert Lighhizer; USDA Secretary Sonny Perdue; Commerce Secretary Wilbur Ross; and others.

While the soybean purchases are a positive sign that the talks are yielding progress, the key to an overall successful deal with be China’s response to U.S. demands that the country stop appropriating U.S. intellectual property through forced technology transfers.

Lighthizer said progress was made on the controversial issue of intellectual property and on U.S. demands that China remove tariff and non-tariff barriers to U.S. farm commodities like chicken, beef, and pork.  However, Lighthizer said it is still too early to predict success.  Xi Jinping in a letter to President Trump offered optimism that the two countries could “meet each other halfway” in upcoming talks.

Lighthizer said he will travel to China soon, although China’s new year festivities may delay negotiations.  President Trump left open the possibility that he could extend the deadline for a conclusion to the talks.  Back in December, the President agreed to postpone a plan to raise the rates of $200 billion in U.S. tariffs on Chinese goods until March 1.

 

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