U.S. President Donald Trump on Monday said he and Chinese President Xi Jinping have agreed to hold off on new tariffs, after the two met over the weekend at the G20 summit in Buenos Aires, Argentina.
“My meeting in Argentina with President Xi of China was an extraordinary one,” Trump tweeted. “Relations with China have taken a BIG leap forward! Very good things will happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!”
Meanwhile, Chinese grain traders said China will need to lower its high tariffs on American agricultural products if the country was to buy the “substantial amounts” of American goods it has promised.
The U.S. said China had promised to purchase an “unspecified but ‘very substantial’ amount of agricultural, energy, industrial and other products, with purchases of farm goods to start ‘immediately,’” according to a Reuters report.
While the two countries have reached a truce, China’s 25 percent tariffs on U.S. grains is still in place. However, there is some speculation that the U.S. and China will lower or remove the tariffs.
In 2017, the United States produced 119.5 million metric tons (mmt) of soybeans, the most on record, according to SoyStats. It exported 56.2 mmt, with China buying 37.5 mmt – nearly $12.4 million in whole soybeans and $24 million in soybean oil. Since trade tensions between the U.S. and China began, soybean prices have been falling – from a 2018 high of $10.77 per bushel to a low of $8.14 per bushel.