President Donald Trump has said that farmers will have difficulty meeting Chinese demand in the context of a preliminary new trade agreement.
At a rally in Louisiana on Friday evening, Trump boasted that in the first phase of an agreement to end a trade war with China, US agricultural imports could rise to as much as $ 50 billion a year.
According to the US Trade Representative, US total exports of agricultural products to China in 2018 were $ 9.3 billion.
"The biggest problem is actually 40 to 50 billion dollars for farm purchases. I do not think our farmers can produce that much – I said that's okay, "Trump said.
At a rally in Louisiana on Friday evening, Trump bragged that US agricultural imports could rise in the first phase of a deal to end a trade war with China
"You know, my people said," Sir, could we bring it to 20 instead? "No, make it 50. Our farmers will now buy more land and they will buy larger tractors," said Trump.
"I said I will not stop at 20. I want them to come back and say, sir, we can not do it because I love my farmers, but they will be busy," he continued.
Finance Minister Steven Mnuchin said Friday that China's agricultural deals could rise to $ 40 to $ 50 billion a year under a retail deal.
Farmers welcomed the announcement, but pointed out that actual purchases had to be tracked.
"I'm excited," said Monte Peterson, a farmer in Valley City, North Dakota, about the first phase of a trade agreement. "That's a pretty good announcement for the US public company."
It is important that China actually accept US agricultural products and not just announce purchases, Peterson said.
"We have to go through it," he said. "We have to see how it is loaded and shipped."
Farmers who had relied on China as the main consumer of US soybean and sorghum and as the main market for pork and dairy products had to face an income decline during the 15-month conflict between the two largest economies.
Trump outlined the first phase of an agreement to end a trade war with China on Friday and suspended a looming tariff increase, but officials on both sides said that much more had to be done before an agreement could be reached.
The emerging agreement on agriculture, currency and some aspects of intellectual property protection would be the two countries' biggest step in 15 months to end a short-term tariff agreement that shook financial markets and slowed global growth Has.
But Friday's announcement did not contain much detail, and Trump said it could take up to five weeks for a pact to be written.
He acknowledged that the agreement might fall apart during this period, but was confident that this would not be the case.
"I think we have a basic understanding of the key issues. We have worked through a considerable amount of paper, but there is still much to do, "US Treasury Secretary Steven Mnuchin said as the two sides met with Trump in the White House. "We will not sign any agreement unless we receive and can tell the President that this is on paper."
After two days of talks between the negotiators, he sat in front of a desk in the Oval Office with Chinese Vice Premier Liu. The president told reporters that both sides were close to ending their trade dispute.
Chinese Vice-Premier Liu He presents a letter from Chinese President Xi Jinping to US President Donald Trump after Trump announced a first phase trade agreement with China
& # 39; There was a lot of friction between the United States and China, and now it's a love affair. That's good, "he said.
In his remarks, however, Liu took on a different tone.
& # 39; We have made significant progress in many areas. We are happy about it. We will continue our efforts, "Liu said.
China's official state news organization Xinhua said that both sides have "agreed to make efforts to reach a final settlement."
In an online editorial by People's Daily on Saturday, China has described the recent round of talks as constructive, open and efficient, stating that it is impossible to resolve the issue while both sides are working towards a resolution problem of arbitrary pressure on the Chinese side. & # 39;
Trump, who wants to turn his back on farmers in political swing states, praised China for agreeing to buy agricultural products worth up to $ 50 billion. But he imposed tariffs on hundreds of billions of dollars of Chinese products.
His announcement was met with skepticism, although it was considered progress.
"I am not sure if it is justified to call agreement on what President Trump has announced," said Scott Kennedy, China Trade Specialist at the Center for Strategic and International Studies in Washington.
& # 39; If they could not agree on a text, that means they are not finished yet. You do not want to reach an agreement. This is not a bad deal. It is invisible. & # 39;
Chinese President Xi Jinping is to be seen last week. Trump and Chinese President Xi Jinping are expected to attend a summit meeting in Chile on 16 November
Mnuchin said the president had agreed not to raise tariffs from 25% to 30% as Chinese goods, which came into force on Tuesday, were worth around $ 250 billion.
However, US Trade Representative Robert Lighthizer said Trump did not decide on tariffs that would come into effect in December.
"I think we will have a deal that goes far beyond the tariffs," said Trump.
Trump's new approach is to phase out the Chinese trade agreement
The two largest economies in the world have made progress in their trade dispute without sealing a deal. In May, US officials accused China of derogating from a comprehensive agreement that was almost completed because it had refused to make changes to China's laws that would ensure its enforceability.
Trump had previously said that he would not be satisfied with a partial agreement to end his efforts to change China's trade, intellectual property and industrial practices, which he claimed would cost millions of US jobs. On Friday, he said he had decided that a gradual approach was appropriate.
US equities rose more than 1% on Friday, but were well below the daily highs after the announcement. The S & P 500 gained 1.09% after rising 1.7% in the hope of reaching an agreement.
Trump and Chinese President Xi Jinping are scheduled to attend a summit meeting of Asian-Pacific Economic Cooperation countries in Santiago, Chile, on 16 November. Trump pointed out that a written agreement could be signed there.
In recent days there have been positive signs from China.
China's Securities Regulatory Commission announced on Friday for the first time a fixed timetable for the abolition of foreign ownership restrictions for futures, securities and mutual fund companies. Increasing foreign access to the industry is one of the US demands for trade talks.
Beijing said it would continue to open its financial sector on its own terms and at its own pace.
On Thursday, the US Department of Agriculture confirmed net sales of 142,172 tonnes of US pork to China in the week of October 3, the largest weekly sale in the world's top pork market.
The president said China has agreed to buy $ 40 billion to $ 50 billion worth of US agricultural commodities. Mnuchin said the purchases would increase annually to this amount.
A person briefed in the talks stated that the proposed provisions on intellectual property protection were essentially aimed at strengthening the protection of intellectual property in the 20th century, for example through copyright, trademarks and piracy. It did not address more difficult issues of technology transfer in the context of data flows, cybersecurity, review of product standards, and a new social credit system to assess corporate behavior.
The status of China's largest telecommunications equipment maker, Huawei Technologies Co Ltd, which has been on the US trade blacklist since May, is not part of the deal, Lighthizer said.
Trump said some IP issues would be left over for later stages of the talks. He said talks on a second phase would start as soon as the first phase of the agreement was signed and said a third phase could also be necessary.
Liang Haiming, Hong Kong-based chairman of the iValley Research Institute of the China Silk Road think tank, said the agreement was "anesthetic, pain relief, not an antidote."