China halts purchases of US soybeans, pork: report

China has reportedly told state-owned firms to stop buying U.S. soybeans and pork, a move that would break a key provision of the phase one trade deal between the world’s two largest economies.

Reuters reported on Monday, citing two unnamed sources, that the order from Beijing also applies to corn and cotton.

According to the newswire, China is retaliating against President Trump for announcing he would strip Hong Kong of its special status.

Trump made the announcement last week in response to a proposed Chinese law that would effectively nullify Hong Kong’s semi-autonomous status, which has been crucial to the city’s economy and position as an international finance hub.

Scaling back U.S. farm purchases could threaten the trade deal signed in mid-January, when Beijing and Washington agreed to dial back steep economic tariffs in exchange for a handful of reforms and a promise by China to buy $32 billion of U.S. agricultural goods.

Trump stopped short of abandoning the agreement when he announced actions against China on Friday, giving shaky markets a boost.

But the president faces tough political choices around China just five months before voters go to the polls to decide whether to give him a second term in office. The increased tensions also come amid an economic crisis resulting from the COVID-19 pandemic.

Canceling the trade deal and upping tariffs on China would add an additional burden to an already struggling U.S. economy.

At the same time, Trump has sought to paint presumptive Democratic presidential nominee Joe Biden as weak on China, putting pressure on the president to show that he’s not backing down from a potential confrontation.