China Agrees to Buy Ag Products in Talks with President Trump
Source: By Chris Clayton, DTN/Progressive Farmer • Posted: Monday, December 3, 2018
The White House issued a statement late Saturday detailing the “highly successful meeting” between Trump and Xi and their staffs in Buenos Aires, Argentina.
On trade, President Trump has agreed that he will not raise tariffs on January 1, 2019, on $200 billion worth of product to 25% but leave the 10% rate in place. The White House stated, “China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural products from our farmers immediately.”
The agreement sets a short deadline of 90 days to come to some agreement on issues such as forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture, the White House stated. If the two countries can’t come to terms, the White House stated the president will raise tariffs to 25%.
The statement from the Chinese government, reported by Xinhau news network, did not mention the U.S. tariff threats or the 90-day deadline. “The Chinese side said it will work to open its market, expand imports and resolve economy- and trade-related issues in China-U.S. relations in the process of a new round of reform and opening-up and in line with the needs of its domestic market and people.”
China and the U.S. also agreed to jointly address the opioid crisis by designating Fentanyl as a controlled substance, meaning that people selling Fentanyl to the United States will be subject to China’s maximum penalty under the law. The two countries also agreed to continue working together to denuclearize North Korea.
Following the signing Friday of the United States, Mexico, Canada Agreement, President Trump also said he would force Congress’ hand on the new trade deal by terminating the North American Free Trade Agreement, which would expire six months after his termination notice.
“I’ll be terminating it within a relatively short period of time. We get rid of NAFTA. It’s been a disaster for the United States,” Trump said. He added, “That’ll be terminated so congress will have a choice of the USMCA or pre-NAFTA, which worked very well.”
Agricultural groups on Friday largely issued lauding press releases supporting the USMCA and called on Congress to approve the new trade deal. Little was said about what will happen with 25% tariffs on Canadian and Mexican steel and 10% tariffs on aluminum that prompted both countries to place retaliatory tariffs on several products, including U.S. agricultural exports such as dairy and grains.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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