China suspends purchases from US farmers as trade war heats up – Washington Examiner
Beijing’s Commerce Ministry announced Monday that it had stopped buying U.S. agricultural goods in retaliation for the Trump administration’s decision last week to enact new tariffs on $300 billion worth of Chinese goods.
The cut-off in farm goods purchases escalates the trade war between the countries following talks last week that produced little progress.
“Related Chinese companies have suspended purchases of U.S. agricultural products,” China’s Ministry of Commerce said in a posting online. It said the suspension would continue until the United States creates the “necessary conditions” for cooperation between the nations. The Dow fell by more than 850 points on Monday’s news.
The announcement is a blow to the U.S. farm industry, which previously counted China as one of its top buyers. Farmers have watched the purchases dwindle as the Beijing and the Trump administration have fought. Overall, China has purchased a little more than 14 million tons of U.S. soybeans over the last year, the lowest level in 11 years. Beijing bought 33 million tons in 2017.
“Farm Bureau economists tell us exports to China were down by $1.3 billion during the first half of the year. Now, we stand to lose all of what was a $9.1 billion market in 2018, which was down sharply from the $19.5 billion U.S. farmers exported to China in 2017,” said American Farm Bureau Federation president Zippy Duvall.
The administration said in May that it would make $14.5 billion in ‘direct payments’ to farmers this year and another $1.4 billion to purchase surplus agricultural commodities in order to compensate for Chinese trade retaliation. It was the second aid package the Trump administration had given to farmers, having authorized $12 billion in assistance last year, also to make up for disruptions caused by trade fights with China and others. Payments are made to farmers who apply for relief through the USDA’s Market Facilitation Program.
Duvall said the aid would help, but urged the administration to resume talks with Beijing. “We urge negotiators to redouble their efforts to arrive at an agreement, and quickly. Exports ensure farmers will continue to supply safe, healthful and affordable food for families here and around the world.”
President Trump announced last week that the U.S. would place 10% tariffs on $300 billion worth of Chinese goods, then said the rate could go as high as as 25%. “China agreed to buy agricultural product from the U.S. in large quantities, but did not do so,” he said.
Prior to Beijing’s announcement, Trump launched another round of Twitter attacks on Beijing. He repeated earlier claims that China was manipulating its currency and that the trade war was benefiting the U.S. “Based on the historic currency manipulation by China, it is now even more obvious to everyone that Americans are not paying for the Tariffs – they are being paid for compliments of China, and the U.S. is taking in tens of Billions of Dollars!” he said.
China’s state broadcaster had previously said on Monday that it was “groundless” for Trump to accuse China of failing to honor commitments to buy U.S. farm goods.