The world’s biggest soybean consumer, China, has ordered state-grain buyers to stop purchases of the product from the US in response to the latest Washington tariffs, Bloomberg reported citing people familiar with the matter.
China boosted the imports as a goodwill gesture when the leaders of the two countries agreed to halt the tariff row late last year. Back then the move provided some relief to a significant part of Trump’s voter base, the American farmers, who are struggling to find buyers for their massive harvest. The renewed Chinese ban can hit them hard, given that soybean futures have recently slumped.
The Chinese state-owned grain buyers don’t expect that the order to continue the purchases will come any time soon, according to Bloomberg. However, Beijing is not going to cancel previous orders for American soybeans. Earlier, it pledged to buy around 10 million tons and is reportedly yet to take delivery of about 7 million tons.
RT has reached out to China’s food processing company Cofco and China Grain Reserves Corporation, Sinograin, to comment on the matter, but has not received their response so far.
China’s move can further drive US grain prices down. Soybean and corn futures plummeted to the lowest price in more than 40 years at the beginning of May, even before Trump raised tariffs on another $200 billion in Chinese goods from 10 percent to 25 percent and threatened to expand the trade war to all Chinese imports. Since then, crop prices have been slightly recovering.
Trump had earlier stressed that US farmers, who are struggling to keep afloat amid the trade spat, will get government support. Last week, the White House rolled out a $16 billion aid program for this purpose.
The reported halt of soybean purchases comes shortly after the expiration of the two-week period, when products already in transit did not face the new hikes. It was expected that the two sides could make a deal during that period and avoid further tit-for-tat tariff increase, but the bitter conflict has only deepened.