After it finally seemed things were going the way we wanted with China—having reached a deal with the country earlier this year—the coronavirus pandemic threw a major wrench into the deal’s implementation.
Worries over whether China will be able to follow through with its promises to purchase agricultural products have mounted. In addition, tensions between the U.S. and China have risen over the spread of the coronavirus.
President Donald Trump has said he will report in the next week or two whether China is fulfilling its promise under the Phase One trade deal signed in January. He said China has been buying a lot of American farm products, but questioned whether the levels were high enough to meet the deal’s commitments.
“They understand they have a deal and hopefully they’re going to get with the deal and we’ll see. They may. They may not. We’re going to find out,” Trump said.
In the trade deal, China agreed to increase purchases of U.S. goods by $200 billion over the span of two years. However, the coronavirus pandemic has dealt blows to both countries’ economies.
In addition, the administration has speculated over the origins of COVID-19, and Secretary of State Mike Pompeo claims the virus originated in a Chinese laboratory, a claim experts and the Office of the Director of National Intelligence have discredited. A report by Reuters said U.S. officials are weighing actions against China as a retaliation for the virus, including possible tariffs and moves to shift supply chains away from China.
White House Press Secretary Kayleigh McEnany highlighted the tensions between the two countries: “Right now it’s a relationship of disappointment and frustration because the president has said how frustrated he is that some of the decisions of China put American lives at risk,” McEnany said.
In terms of U.S. ag products currently being purchased by China, soybeans have taken the lead, but China will still need to import at least 40 million tons of soybeans to be on pace with the Phase One deal. China has purchased 2.5 million bales of U.S. cotton as of April 23, the largest to date since 2014. Sorghum, corn and wheat sales are all fairly below Phase One expected levels.
April sales for U.S. meat have been big—pork exports have reached a record high and weekly beef exports have reached record levels with the 30-month age ban on beef lifted.
The outcome of halted progress as a result of the coronavirus is uncertain, but so far no further steps have been taken to continue trade talks for a Phase Two of a trade deal. — Anna Miller, WLJ editor
