Beijing has demanded its state-owned enterprises suspend imports of US agricultural products after US-China trade tensions spiraled further last week, according to Bloomberg, citing sources.
China’s state-run agricultural firms are now biding their time, in anticipation of further trade talks between the two countries, the sources added, opting for anonymity.
“The leverage that China has is its large agricultural purchases,” Darin Friedrichs, a senior analyst at INTL FCStone’s Asia commodities division, said in an interview on Bloomberg TV. “This does affect US farmers and the rural US voting base that’s normally in support of Donald Trump. If they hit back before the election, that’s the obvious way to retaliate.”
China had reportedly already cut back on US purchases, with soybean imports sinking to a decade-low during the first half of this year, with Chinese buyers switching to Brazilian soybeans.
China’s Commerce Ministry has yet to comment on the media report.
US President Donald Trump on 1 August proposed slapping further 10% tariffs on another $300 billion in Chinese imports from 1 September, a day after the US and China wrapped up trade talks in Shanghai.
Donald Trump has repeatedly complained China failed to back up its pledge to make the “large quantities” of agricultural purchases that he claims President Xi Jinping promised during the G-20 summit in Osaka.
On Friday the Chinese Foreign Ministry said that countermeasures would be installed if the US set the tariffs hike in motion.
The Chinese Foreign Minister, Wang Yi, said tariffs are "not a constructive" way to solve the US trade war, AFP reported.
Washington and Beijing have been embroiled in a trade war since June 2018, when Donald Trump announced he was imposing tariffs on $50 billion worth of Chinese imports in a bid to balance the trade deficit. Since then, several rounds of tit-for-tat tariffs have been imposed by the two countries.
In June, Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce that would halt imposition of additional tariffs and re-launch trade negotiations.
The first bilateral trade talks since the G20 summit wrapped up in Shanghai on 31 July, with the White House saying the US and China would continue trade negotiations in September in Washington.
