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US–China Trade Deal Boosts Optimism for Farmers, Banks, and Markets

October 13, 2019

WASHINGTON—President Donald Trump on Oct. 11 praised the new partial agreement with China, saying “there’s never been a deal of this magnitude for the American farmer.”

 

Following two days of talks between top-level U.S. and Chinese trade officials in Washington last week, Trump announced that the United States reached a partial trade agreement “in principle” with China, on intellectual property, financial services, and agriculture.

 

Beijing agreed to purchase “up to $40 billion to $50 billion” in agricultural products from the United States.

 

“That’s the largest order in the history of agriculture, by far, by two and a half times,” Trump said Oct. 11 at his meeting with Chinese Vice Premier Liu He in the Oval Office, after the conclusion of negotiations.

 

“The farmers are going to have to work a lot of overtime to produce that much,” he said. “So I’d suggest the farmers have to go and immediately buy more land and get bigger tractors.”

 

As part of the agreement, Washington suspended the tariff increases on Chinese goods scheduled to take effect this week.

 

“We’ve been through a very tough negotiation. There’s never been a negotiation like this,” Trump said at the meeting.

 

He called the agreement “a very substantial phase-one deal,” adding that there will be two or three phases in China trade talks. The president also said that progress was made on currency and foreign exchange issues as well as technology transfer discussions.

 

Since the beginning of the trade conflict in 2018, Trump has repeatedly accused China of targeting U.S. farmers.

 

China’s retaliatory tariffs since last year have affected a host of farm products, including soybeans, corn, wheat, cotton, rice, and sorghum, as well as livestock products. Soybean farmers have been among those hit hardest, as they accounted for nearly 10 percent of total U.S. exports to China before the trade war.

 

According to experts, Beijing’s retaliation has been selective and strategic, aiming to hit counties in rural areas in the Midwestern plains and Mountain West states that are Republican strongholds.

 

FULL REPORT

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