BEIJING (BBC): China’s purchase was hailed as a “wonderful” step by US officials
China has bought US
soybeans for the first time since the trade war between the two countries
started in July.
The country’s finance
ministry also confirmed it would temporarily reduce tariffs on US car imports
from 40% to 15%, beginning on 1 January.
The much anticipated
moves follow a truce reached after Presidents Donald Trump and Xi Jinping met
In announcing the
tariff suspension, China said it hoped the two sides would speed negotiations.
US officials hailed
China’s purchase of 1.13 million tonnes of US soybeans on Thursday as a
“great step” – but said it remained uncertain if a broader deal would
“Having a million,
million-and-a-half tonnes is great, it’s wonderful, it’s a great step,”
said Steve Censky deputy secretary of the US Department of Agriculture.
“But there needs
to be a lot more as well, especially if you consider it in a normal, typical year,
we’ll be selling 30 to 35 million metric tonnes to China.”
Analysts also cautioned
against interpreting it as a sign that the trade war was cooling.
Chief economist Robert
Carnell from ING Bank told the BBC that the recent arrest of Meng Wanzhou,
Huawei’s chief financial officer and deputy chair, was far more indicative of
the current state of the trade war.
Huawei finance chief
arrested in Canada
US-China trade row:
What has happened so far?
“[It’s] a battle
for technology, a battle for 5G,” he said. “In particular, Huawei has
become one of the world’s biggest suppliers of telecoms technology – and the US
doesn’t really like that.
“[So that arrest]
is giving you a much better, a much clearer message on where the trade war
lines in the sand are really being drawn.”
How did this start?
The trade war started
over US claims that China engages in “unfair” trade practices, such
as intellectual property theft.
It has seen the two
countries levy tit-for-tat tariffs on hundreds of billions of dollars of goods,
including cars and soybeans.
Earlier this month, the
two sides agreed to postpone any further increases, pending negotiations. US
officials also said China had committed to major purchases of US goods and
reducing the tariffs on US-made cars.
US and China agree to
suspend new tariffs
The bean at the heart
of America’s trade war
What is a trade war and
why should I worry?
Why do soybeans matter?
China is by the far the
world’s biggest importer of soybeans, accounting for some 60% of the global
trade in the commodity last year.
The country, which uses
the crop to feed livestock, has historically relied on supplies from both the
US and Brazil, in part due to seasonality.
But purchases from US
farmers – an important part of Mr Trump’s political base – have plummeted since
the trade war began.
failed to excite traders in the US, who said the numbers fell short of
“It’s a start, but
it’s not nearly enough to fix our problems in regards to soybeans and a soybean
oversupply in this country,” said Joe Vaclavik, president of Standard
Grain, a Tennessee-based brokerage.
Mr Carnell from ING
Bank said he thought China’s purchase on Thursday was more about convenience
than anything else.
“The simple fact
is China needs a lot of soybeans and it’s been buying them from Brazil, not the
US,” he said.
“But Brazil could
never supply all the soybeans China needed, so ultimately [China has] been
driven back to US soybeans. And I think it’s just convenient for them to do
that right now.”