AFB: China Still M king Ag Purchases

An American Farm Bureau trade official says, despite a rising call by the president and lawmakers to move supply chains away from China amid the pandemic, Beijing’s continuing to carry out its Phase One deal with the U.S., including for agriculture.

AFB trade adviser Dave Salmonsen says China’s still buying.

“They have been in the market for soybeans and corn and wheat and beef and pork and cotton.  And just last week, we heard that they had granted some more tariff waivers for products like barley and blueberries.”

But as for hitting the Phase One $40-billion target for U.S. ag goods.

“Every month, they needed to buy, to meet the 40-billion commitments they made in the Phase One agreement. They’re not on track for that, yet. We know the reasons for that, with their economic hits they took over the last few months with the COVID-19. And, the fact that a lot of their buying of course occurs in the fall during our harvest time. And, of course, they buy their major amount of soybeans.”

The first quarter’s seen a bit over $5 billion in Chinese U.S. ag buys.

“So, we’re hoping that ramps up. But, certainly, any deterioration in U.S.-China relations, we would look upon that as, something to watch. And whether that impacts how China’s going to work on their purchase commitments. We hope that they live up to their side of the bargain.”

China’s already ended many beef restrictions and those on poultry and pet food, and started engaging on biotech rules.

Salmonsen can’t predict post-pandemic trade relations with China, amid rising U.S. anti-China sentiment, but trade remains key for producers.

“There is a recovery…and, given the importance of trade to U.S. agriculture, trade needs to be a part of that trade with China, trade with our North American neighbors, trade around the world.”

So, while much of the attention here is on diversifying U.S. supply chains away from China, U.S. agriculture is still focused on China as a major customer for U.S. farm goods.