The United States will not implement increases to tariffs on Chinese goods that were scheduled for Oct. 15. This slight easing of trade tensions follows productive meetings in Washington last week that President Donald Trump says led to a tentative trade deal.
Details are scarce and nothing has yet been signed.
Trump emerged from talks on Friday saying China will buy between $40 billion and $50 billion in U.S. agriculture products, if the deal goes through.
That’s significantly more than any single-year of U.S. exports to the Asian giant. China bought $29 billion worth of U.S. agriculture products its peak year, but just under $20 billion in 2017 before the trade war began. Last year, amid tariffs and trade tensions, it imported $9.2 billion worth of U.S. agricultural goods.
It’s not clear whether the new proposed number reflects an annual promise, or total purchase over some other period of time, says Wendong Zhang, an agriculture economist at Iowa State University.
“The Chinese probably left more wiggle room,” he says. “There’s a really big number, but there’s no timeframe tied to it.”
Still, Zhang welcomes what he calls important first steps, though he says the two sides are each still angling to come out ahead.
“The trade war has been elevated so much,” he says, “in the end, both countries need to find a way, that, in some respects, both leaders (can) go back and say we won the trade war.”
Zhang says a shallow agreement on big issues like technology transfer and intellectual property protections is likely. If significant increases in Chinese imports come to fruition, he says likely beneficiaries will be U.S. corn, ethanol and beef.
Overall, Zhang sees the announcement as a positive sign that’s offering some hope, but now farmers and others will wait to see whether the threat of December tariffs is also lifted and what ultimately gets formalized into a deal. And Zhang adds that U.S. soybeans, which were hurt most by the tariffs, will probably never regain the size of the Chinese market they once enjoyed.