Truce with China Good News for Farmers
Soybean growers are very much applauding the good news that came out regarding trade with China. Recent tensions between the U.S. and China have heavily weighed in on commodity prices.
But now positive reports from the G20 Summit Saturday night (12/1) that President Trump and Chinese President Xi Jinping have potentially agreed to deescalate the current trade friction by not raising tariffs further while negotiations continue.
According to a White House statement, China has also agreed to purchase more U.S. agricultural and other products. John Heisdorffer, a soybean grower from Keota, Iowa, and American Soybean Association (ASA) president said,
This is the first positive news we’ve seen after months of downturned prices and halted shipments. If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry. We want to begin repairing damage done to our trade relations with China, which has been essential to successful soybean exports for years.
Under the agreement reached on Saturday, tariffs on $200 billion worth of goods will not increase to 25 percent on January 1 from the current 10 percent level. Details have not been announced regarding the quantity of U.S. goods that China will purchase, but the White House statement indicated that purchases of ag products would begin immediately.
Monday's global markets (12/3) reacted positively on grain prices and stocks.