The trade war between China and the United States continues, with farmers in the cross hairs. The newest update comes from a report from Bloomberg: “China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated.”
State-grain buyers haven’t received any further orders to continue with the so-called goodwill buying and don’t expect that to happen given the lack of agreement in trade negotiations, according to the report citing people familiar with the matter.
Before this, China increased imports as a goodwill gesture while leaders were discussing a trade agreement. Bloomberg also reported Beijing is not going to cancel previous orders for American soybeans.
So far today, the news has not affected the price of soybeans as the grain market was actually on the rise during the morning — but still not close to where prices were before the trade war.
The latest move from China comes after President Trump raised tariffs on another $200 billion in Chinese goods from 10 to 25 percent, with the threat to expand to even more Chinese imports if an agreement was not reached quickly. Trump increased tariffs since China was backing out on part of their agreement.
After the news of increased tariffs, soybean prices slumped to a decade low, but have since recovered due to the unpredictable spring weather with many farmers unable to plant all of their crops.
In order to help farmers during the second year of the trade war, the Trump Administration announced a second round of trade assistance. The USDA announced last week more details of the second round of the Market Facilitation Program. The president has authorized the USDA to provide up to $16 billion in programs. Different than last year, the payment rates will be a single county rate.
Trump has not made any announcements or tweets on China’s new move. Hopefully an agreement can be reached quickly in order to resume normal trade for farmers.