Missouri — The U.S. Secretary of Treasury, Steven Mnuchin told Fox News the ‘Phase One’ signing is reported to bring $40 billion to $50 billion in agriculture. Mnunchin also said more land may have to be bought to produce the export demand.
Harold House of the Kansas City Trading Group deals with this kind of information on a daily basis. Mr. House said this new trade agreement sounds better than NAFTA but it is going to take some time until we know the exact numbers and impact the ‘Phase One’ signing will have.
Imported soybeans to China in December surged 67% from a year earlier, to a 19-month-high. Customs reported 9.54 mmt of soybeans imported in December. House said it is unclear exactly what China will increase on buying.
Some analyst speculate whether China will sign the agreement with what the U.S. has proposed. South America is reportedly going to have a decent soybean crop this spring to compete with. There is also concern over China’s newly imposed nationwide E10 blending mandate, which would cause concerns for U.S. oil being exported there.
The U.S. would definitely like to amp up hog production to China. The National Pork Producers Council is watching this deal very closely. China’s recent outbreak of the African Swine Fever, could mean good pork business for the U.S. House said even this piece of the puzzle is unclear.
Reuters reported the deal to be signed suspends Trump’s plans to levy tariffs on $156 billion in Chinese electronics and toys. It also cuts the tariff rate to 7.5% on $120 billion worth of Chinese imports on all kinds of commodities.
But it leaves in place 25% tariffs on $250 billion worth of machinery, electronics, , and lighting products.
Even if Trump’s remaining China tariffs go away in the coming months with a ‘Phase 2’ agreement, U.S. exports may not recover according to some reports.
U.S. Trade Representative Robert Lighthizer told Fox Business Network, the U.S.-China trade agreement was almost completed and it would be made public just prior to a signing ceremony.
“We are about finished with the translation. It always takes time,” Lighthizer told Fox Business Network.
President Trump is expected to speak Saturday, at the 101st consecutive American Farm Bureau Federation’s Annual Convention & Trade Show in Austin Texas.