The Trump administration has proposed a new round of trade talks between the U.S. and China to stop an additional round of tariffs on Chinese exports. The Wall Street Journal reports the invitation comes as the Trump administration senses new vulnerability—and possibly more flexibility—among Chinese officials pressured by U.S. tariffs imposed earlier this year and threats for more. Treasury Secretary Steven Mnuchin made the invite, but officials in China are growing concerned with the unpredictable decision-making process by the Trump administration and some speculate that China may be hesitant to accept any meeting invite.
The move could be seen as a breakthrough, however, as Trump is talking up a sharp drop in the Chinese stock market and its fragile economy, compared to U.S. economic indicators. Any movement towards reducing or removing the retaliatory tariffs China has placed on U.S. agriculture is considered positive, as China is looking elsewhere to fulfill import needs.
China this week lowered its forecast for the 2018-2019 import season for soybeans due to the trade conflict. Chinese farmers are reducing their use of soybeans in animal feed. Imports of soybeans in the crop year that starts on October 1 will be 83.65 million metric tons, down 10.2 million from last month’s estimate of 93.85 million, according to China’s Ministry of Agriculture and Rural Affairs. Overall, the forecast is lower than the 93.9 million metric tons imported during the 2017-2018 crop year. China claims the lower forecast is partially due to the promotion of lower-protein feed for livestock and poultry, and falling profits at pig farms reducing demand for soybean meal.
China also raised its corn demand outlook on rising feed consumption and an expected increased ethanol production. Reuters reports that the outlook illustrates how China’s vast pig farming sector is rapidly adjusting to a possible prolonged trade dispute with Washington. In July, China imposed an additional 25 percent tariff on U.S. soybeans.
Source: NAFB News Service