Trump promises China is 'back in the market' for US soybeans, but government data suggests otherwise
- President Donald Trump said on Tuesday that the US was already selling loads of soybeans to China, as trade talks with Beijing resumed via telephone, with more meetings expected in the near future.
- Trump told Reuters in a story published Tuesday night that China was "back in the market" and "buying tremendous amounts of soybeans" after the US and China reached a trade-war truce on December 1.
- But while Chinese officials reportedly said there has been no decline in China's appetite for US-originated soybeans, US government data shows no new large purchases of soybeans, Reuters reported.
- The news wire service said traders have seen no signs of soybean movement since China imposed a 25% tariff in July.
- Iowa grows soy, soy feeds pigs, China loves pigs. This is an example of how trade between the world's two major economies works, when it works.
President Donald Trump said on Tuesday that China was already busy purchasing a "tremendous" amount of US soybeans, Reuters reported on Tuesday.
But while Trump told the news wire service that the Chinese government was "back in the market" to buy soybeans - a critical livestock feed for China - after a December 1 truce in the US-China trade war, the details remain sketchy.While the resumption of US soybean exports will be welcomed by struggling US farmers, Reuters reports that traders in Chicago flagged that they've seen little evidence of any soybean sales since July, when China first hit farmers with its targeted 25% tariff.
Certainly, according to unnamed officials who spoke to Bloomberg, there has been no decline in China's hunger for US-originated soybeans.
In fact, the first batch of upcoming Chinese US soybean purchases will almost entirely be stockpiled for state reserves, Bloomberg said.
Additionally, Trump claimed that trade talks with Beijing were already underway by telephone, with more meetings between officials from both countries likely.
A soybean story
Soybeans are used largely for pork feed. And these days China is eating a lot of pork.
Pork products are disappearing at more than twice the global average in China. The meat is so important there now that the country produces some 700 million of the animals every year - more than half of which come from family farms, according to a Reuters report published in February.China is also the only country to keep a strategic pork reserve.
China's absolute domination of the global soybean market has emerged alongside its demand for meat - particularly of the pork variety - as its middle-class consumers move off a rice-dominated diet to one where pork and poultry dominate.
China's livestock numbers have risen to meet the meat demand, but it has been unable to produce enough animal feed to keep up.
It is a fascinating example of just how intertwined the US's and China's economies are, with farmers in Iowa sweating on the news coming out of China on just when trade will resume.
"I just heard today that they're buying tremendous amounts of soybeans. They are starting, just starting now," Trump told Reuters on Tuesday.
But, according to Bloomberg, which cited unnamed Chinese officials who spoke on the matter, said "the final decision will be made by the State Council or cabinet."
It has been more than a week since Trump and his Chinese counterpart Xi Jinping supposedly nailed down the details of a trade-war truce at a spotlit G20 meeting in Argentina.However, while one side reported the good news one way, the other side had its own interpretation. And in the end, neither version went anywhere near to easing trade tensions that have erupted again following the arrest of Sabrina Meng Wanzhou.
Meng is a top executive with the Chinese telecommunications manufacturer Huawei - and the daughter of its founder Ren Zhengfei.
China loves its soybeans, and as the world's biggest buyer, it has been very lean times for livestock literally reared on the stuff.
Brazil is a major supplier, but it is the US, where around a full third of China's supply is grown that plays the keystone role in the protein rich feed.
Reuters reports that traders have been on the lookout for any signs of US soybean purchases out of China, particularly after the president hit social media, tweeting on Tuesday morning of "very productive conversations" with China on the issue.
"Watch for some important announcements!" Trump added.