China is stepping away from further U.S. farm imports after President Donald Trump ratcheted up tensions with its biggest agricultural trading partner last week.
The Chinese government has asked its state-owned enterprises to suspend purchases of U.S. agricultural products, people familiar with the situation said. Also, privately run Chinese crushers that had received retaliatory-tariff waivers on American soybeans from Beijing have stopped buying the commodity due to uncertainty over trade relations, other people said.
President Trump on Thursday proposed adding 10% tariffs on another $300 billion in imports from Sept. 1, marking an abrupt escalation of the trade war between the world’s largest economies shortly after the two sides restarted talks. Bureaucrats in Beijing were stunned by Trump’s announcement, according to Chinese officials who’ve been involved in the trade talks, and Beijing has pledged to respond if the U.S. insists on adding the extra tariffs.
China’s state-run agricultural firms have now stopped buying American farm goods, and are waiting to see how talks progress, the people said, declining to be identified as they’re not authorized to speak to the media. Meanwhile, the private crushers haven’t received notices from the government on any policy change since the U.S. escalated tensions last Thursday, people said.
“The leverage that China has is its large agricultural purchases,” Darin Friedrichs, a senior analyst at INTL FCStone’s Asia commodities division, said in an interview on Bloomberg TV. “This does affect U.S. farmers and the rural U.S. voting base that’s normally in support of Donald Trump. If they hit back before the election, that’s the obvious way to retaliate.”
[To read the original article, click here]