China to speed up US farm purchases under ‘phase one’ trade deal

Beijing plans to accelerate purchases of American agricultural products to comply with the US-China ‘phase one’ trade agreement, Bloomberg has reported, citing sources.

The report follows talks between US Secretary of State Michael Pompeo and China’s top foreign policy official in Hawaii this week.

According to a person familiar with the matter, the world’s top soybean importer, China, intends to step up buying everything from soybeans to corn and ethanol after purchases dropped due to the Covid-19 pandemic.

A separate person said that Chinese authorities asked state-owned agricultural buyers to make every effort to meet the phase one accord. 

On Thursday, Pompeo said that China’s top foreign policy official had promised to honor all of the commitments under the trade deal. “During my meeting with the [Chinese Communist Party] Politburo member Yang Jiechi, he recommitted to completing and honoring all of the obligations of Phase 1 of the trade deal between our two countries,” Pompeo tweeted.

The development could ease trade disruptions between the world’s two largest economies, which have exchanged blows lately over everything from the origins of the Covid-19 outbreak to new security legislation in Hong Kong.

Under the terms of the trade deal, China pledged to buy an additional $200 billion worth of US goods over the next two years, including $50 billion worth of agricultural products. The US, for its part, has reduced tariffs on some Chinese goods, but maintained duties on $375 billion worth of products.

Phase one of the US-China trade deal obligated Beijing to buy $36.5 billion worth of American farm goods, up from $24 billion in 2017, before the trade war. Statistics show, however, that China had purchased only $4.65 billion in the first four months of the year.

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