The U.S. and China agreed late last week on the outlines of a partial trade accord that President Donald Trump said he and China’s Xi Jinping could sign as soon as next month.
As part of the deal, news reports said that China would significantly step up purchases of U.S. agricultural commodities. Trump, speaking from the Oval Office, said the two sides had reached a verbal “phase one” agreement that would take several weeks to write.
The initial deal, which Trump said had been reached “in principle” would involve China buying $40 billion to $50 billion worth of American agricultural products, along with agreeing to guidelines on how it manages its currency. The agreement also includes some provisions on intellectual property, including forced technology transfer and would give American financial services firms more access to China’s market, the president said.
In exchange, the United States will pull back plans to raise tariffs on $250 billion worth of Chinese goods to 30% next week.
Iowa lawmakers were cautiously optimistic about news of an agreement with China that would boost ag exports.
“Any time progress is made, that’s good news," said Iowa Sen. Charles Grassley. "Farmers in Iowa know far too well that the trade war has caused real financial pain in the Heartland. But we need to know more about this deal and follow-through from China will be key."
Prior to the announcement of a tentative deal, Chinese importers increased their purchases of U.S. agricultural goods. The U.S. Department of Agriculture confirmed large sales of soybeans and pork to China.
Japan deal signed
Earlier in the week, agriculture leaders applauded the formal signing of a trade deal between the United States and Japan that is expected to boost exports of U.S. beef, pork and grains.
“This agreement means sharply lower tariffs on our farm and ranch exports with the promise of more to come,” said Zippy Duvall, American Farm Bureau Federation president.
The bilateral trade pact, which is scheduled to take effect next spring, cuts or eliminates tariffs on $7.2 billion worth of U.S. ag commodities exported to Japan.
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