Trade war: China won’t rush into agriculture purchases under ‘phase one’ deal, US government adviser says
- China has pledged to buy at least US$80 billion in US agricultural products in the next two years, according to US trade representative Robert Lighthizer
- Tom Kehoe, an adviser to the US Department of Agriculture and the US Trade Representative, says the purchases will be decided by market prices
Chinese buying of American farm products will be determined by how competitive they are, and not just by estimates laid out in an initial trade accord, according to a US government trade adviser.
“These are businesspeople,” Kehoe said. “They are going to have to be in a competitive situation. Otherwise, they are not going to buy it.”
These are businesspeople. They are going to have to be in a competitive situation. Otherwise, they are not going to buy it
Sill, Beijing made detailed pledges on agriculture that would see it purchase at least an additional US$16 billion annually in commodities on top of the pre-trade war level of US$24 billion and endeavour to buy as much as US$50 billion annually, according to Lighthizer.
Kehoe said that specific quantities are not being announced because details may move market prices, and that would be “unfair”.
“There are safeguards built in [for both countries] to live up to what they’ve promised,” and those details will be released in the “next few days”, he said. “Pretty much all [agriculture] markets are involved: most of the grains, beans, pork, some seafood.”
China probably will meet the targets because the threatened December 15 tariffs did not go into effect, and because some existing 15 per cent tariffs are being reduced to 7.5 per cent – resulting in billions of US dollars in products facing lower levies, he said.
