OMAHA (DTN) -- The United States and China reached a partial trade agreement on Friday, following a series of meetings in Washington, D.C., between trade officials on both sides and a meeting on Friday between President Donald Trump and China's top trade negotiator, Vice Premier Liu He.
The U.S. agreed to hold off on scheduled increases in tariffs on billions of dollars of Chinese goods in exchange for China expanding purchases of American goods, including agriculture products. China is expected to make between $40 billion and $50 billion in agriculture purchases.
In exchange, the U.S. has agreed not to raise tariffs on $250 billion of Chinese goods from 25% to 30%.
The two sides are expected to meet again in Chile in the next couple of months, according to press pool reports.
"Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!," Trump tweeted Friday morning.
"One of the great things about the China Deal is the fact that, for various reasons, we do not have to go through the very long and politically complex Congressional Approval Process. When the deal is fully negotiated, I sign it myself on behalf of our Country. Fast and Clean!," Trump said in another tweet.
The U.S. exported 13.4 million metric tons (mmt) of soybeans to China in 2018-2019, down from 27.7 mmt in 2017-2018.
USDA said China bought 2.09 mmt of U.S. soybeans and 130,000 metric tons (mt) of U.S. wheat from Sept. 27 to Oct. 3. China has stepped up purchases of U.S. soybeans this year, totaling 4.79 mmt for delivery in the 2019-20 marketing year. That total was just 1.08 mmt at this time last year. China also has bought 142,000 tons of pork for 2019-20.
According to the American Farm Bureau Federation, U.S. agricultural exports to China have fallen from $19.7 billion in 2017 to $9.1 billion last year and were down another $1.3 billion in the first half of 2019.
CHINA TRADE TIMELINE
The trade war has seen a number of twists and turns in 2019:
Feb. 22: Agriculture Secretary Sonny Perdue tweets, "In Oval Office meeting today, China has committed to buy an additional 10 million metric tons of U.S. soybeans. Hats off to @POTUS for bringing China to the table. Strategy is working. Show of good faith by the Chinese. Also indications of more good news to come."
Feb. 24: With possible 25% tariffs on China looming, President Trump tweets that talks will continue without new tariffs imposed.
Feb. 28: U.S. wins a World Trade Organization case against China on wheat and rice subsidies from 2012 to 2015 that exceeded China's subsidy commitments.
May 10: With no breakthrough in talks, President Trump raises a 10% tariff on $200 billion in Chinese goods up to 25%. The president also said he was willing to support $15 billion in additional trade-aid payments to farmers. The president also begins action to place additional 25% tariffs on $300 billion more in Chinese goods.
May 23: USDA announces a $16 billion aid package for farmers that requires farmers to plant a crop during one of the hardest planting seasons in recent memory. USDA will pay crop farmers based on a single county payment rate multiplied by a farm's total planted acres in 2019.
June 29: President Trump tweets he met with Chinese President Xi Jinping at the G-20 summit in Japan and pledges to hold off on 25% tariffs against $300 billion more in Chinese products as negotiations will restart. Calling farmers "patriots," the president said, "And China is going to be buying a tremendous amount of food and agricultural product, and they're going to start that very soon, almost immediately. We're going to give them lists of things that we'd like them to buy."
July 3: DTN's National Cash Corn Index settles at $4.03, a 30-cent decline since mid-June. The DTN National Cash Soybean Index is $8.04 a bushel, a 32-cent drop since that time. The DJIA closes at a record high of 26,966.
Aug. 23: Trump then said $250 billion in Chinese products subject to 25% tariffs will instead face a 5% higher tariff starting Oct. 1, putting the tariffs for those products to 30%. Further, another $300 billion in goods that were facing new 10% tariffs starting Sept. 1 would now face 15% tariffs instead.
Todd Neeley can be reached at firstname.lastname@example.org
Follow him on Twitter @toddneeleyDTN
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