The Strategist

China is ready to resume agricultural import from USA

09/09/2019 - 07:20

Beijing may resume small purchases of American farmers' products, which they stopped importing in early August at the height of the trade war. But not for free: in exchange, the Chinese want to solve some of the problems for their tech giant Huawei and delay introduction of the next round of duties.

China has proposed an interim peaceful solution to the US-China trade dispute. The Eastern country declared that it was ready to resume a small volume of purchases of agricultural products from America.

This initiative was put forward by the Chinese side in telephone conversations before the next face-to-face meeting with the United States, Politico reported citing two sources. However, this can be done in exchange for some kind of resolution on the case of the Chinese tech giant Huawei, the sources explained. In particular, Beijing wants to ease export restrictions for Huawei.

The company was blacklisted by Donald Trump’s presidential decree on May 15. The US claimed that particular activities of the Chinese company threatened the country's national security. The ban hindered the company business as a whole, since it is dependent on American components. Now, Huawei has no access to purchase of components from American companies, and selling products in the US market has become more difficult.

In addition to the Huawei case, the Chinese also put forward the second condition. They want to delay Donald Trump's promised increase in duties from October 1 on goods totaling about $ 250 billion. They will be levied with a duty not of 25%, but 30%, Trump recently said.

On September 2, Beijing filed a lawsuit against the United States with the World Trade Organization. China did not disclose many details of its complaint to the WTO, but noted that they relate to US duties on goods worth $ 300 billion. This portion of the duties came into force on September 1.

The Chinese statement on the start of the WTO trial with the United States indicated that their introduction was contrary to the agreements reached at the G20 in Osaka between Donald Trump and Chinese President Xi Jinping.

Beijing has stopped purchasing agricultural products from the United States since August 5. President of the American Federation of Farmer Bureau Zippy Duvall called this act a "death blow to thousands of farmers" who are already in a difficult situation.

China is the fourth largest buyer for American farmers; to lose it means to suffer big losses. According to the official data of the American side, in 2018, Beijing imported US $ 9.1 billion of agricultural products from the United States. The extent to which China may again purchase US agricultural products is still unclear.