With trade talks between the U.S. and China heating up this week as the two sides work toward a new deal, Beijing has proposed buying an additional $30 billion worth of agricultural imports like soybeans, corn and wheat.
The offer is part of the memoranda of understanding (MoU) between the U.S. and China as the two sides negotiate in Washington this week. The additional purchase would be on top of what China was buying before the trade war began and would continue for an agreed-upon number of years.
U.S. farmers have been hit particularly hard since the tit-for-tat tariffs battle between President Donald Trump and China began. The U.S. government bailed the farmers out with $12 billion in emergency aid.
Also as part of the talks, officials will discuss removing anti-dumping and anti-subsidy tariffs on distillers’ dried grains, a by-product of corn ethanol used in animal feed. The news sent soybean, corn and wheat futures prices rising.
China has offered to increase agricultural purchases in an attempt to shorten the massive trade deficit between world’s two largest economies. China has resumed importing farm goods like soybeans since the tariff truce was called in December. President Trump said this week China could also be adding “a lot of” corn to its import list, a boon for U.S. farmers who have struggled under the weight of the trade war.
The MoUs under discussion are also said to cover areas including non-tariff barriers, services, technology transfers and intellectual property. The enforcement mechanism remains unclear, but would likely be a threat that tariffs would be reimposed if conditions aren’t met, a person said earlier.
Nobody responded to a fax sent to China’s Commerce Ministry late Thursday. Gao Feng, a spokesman for the ministry, said at a briefing earlier that he had no details regarding any MoU being discussed with the U.S. He also said that he couldn’t offer any information on the results of the trade talks until the current round ends.
In 2017, China imported a total $24.2 billion in American agricultural products, with 60 percent of that in oilseeds and the remaining in products such as meat, cotton, cereals and seafood. Combined purchases slumped by a third to about $16 billion last year as China’s 25 retaliatory tariffs on American farm goods reduced imports.