China intends to buy at least $20 billion worth of U.S. agricultural products if it signs a partial trade deal with Washington and would consider boosting the purchases further in future rounds of talks, according to a Bloomberg report.
Purchases of $20 billion would return Chinese imports of American farm goods roughly back to the levels of 2017, before the intense trade war was sparked between Washington and Beijing. People familiar with the matter told the news outlet that the purchases could rise to as high as $40 billion-$50 billion in the second year of a possible final deal once all tariffs are lifted.
{mosads}U.S. and Chinese officials are currently working on hammering out the details of a limited trade agreement that both governments have hinted could be signed when President Trump and Chinese President Xi Jinping meet in Chile next month.
The two sides reached an initial deal earlier this month that would postpone an upcoming increase of tariffs on Chinese goods in exchange for Beijing drastically increasing imports of American crops. The agreement is meant to provide a brief economic reprieve for both nations as they seek a broader deal.
China has already begun increasing its purchases of agricultural goods. It issued waivers for 10 million tons of soybean purchases this week and is mulling approving an additional 4 million-5 million tons of grains, including wheat, corn and sorghum, according to Bloomberg.
Trump has been quick to hype the deal as a victory for farmers as negotiations continue.
“The deal I just made with China is, by far, the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country. In fact, there is a question as to whether or not this much product can be produced? Our farmers will figure it out. Thank you China!” he tweeted this month.
However, observers have cautioned that China has previously retreated from similar promises of agricultural purchases.
“The Chinese don’t want Xi to move forward with this initial phase or this initial detente if they don’t get rid of the December tariff threat as well,” Stephen Myrow, managing partner at Beacon Policy Advisors, told The Hill this month. “No matter what they sign, they don’t really trust Trump.”