China rumored to have started suspending agribusiness purchases from the USA

Anonymous sources have stated that China has asked its state-owned companies to suspend purchases of soybeans and pork from the United States.  This is because of what President Donald Trump said last Friday, May 29th. He said that he will begin a process to eliminate Hong Kong’s special treatment, through measures ranging from an extradition treaty to export controls. This would be a response to China’s plans for imposing new security legislation on Hong Kong.

According to one of the sources, large volumes of American purchases of corn and cotton have also been suspended by China and they may also suspend other agricultural products from the United States if the president takes any additional measures.  Chinese importers canceled 10,000 to 20,000 tonnes of U.S. pork shipments – the equivalent of nearly a week’s worth of orders in the past few months – after Trump’s comments on Friday, according to one of the sources.

In the worst-case scenario, if Trump continues to target China, the Chinese government would have to abandon phase 1 of the trade agreement between the two countries, stated a second source with knowledge of the government’s plans.  “There will be no way for Beijing to buy additional products from the US while it is receiving constant attacks from Trump,” the person said.

China has committed itself to additional purchases of American agricultural products worth US$32 billion over 2 years under the trade agreement signed in January, established in 2017. Private importers have not received requests from the government to suspend purchases from the US, according to a third source, who stressed however that buyers are cautious at the moment.

Source: Reuters

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