US Claims China Pledged $40bn in “Phase One” Food Purchases, There’s Only One Problem With That
China's agricultural exports never exceded $25bn even in the best of years
US Trade Representative Lighthizer has released some details of the phase one US-China trade deal… there’s just one big elephant in the room that is raising a few eyebrows.
Apparently confirming President Trump’s comments, Lighthizer told reporters that China has agreed to purchase USD 40bln in Agricultural goods in the first year (with best efforts to increase that to USD 50bln) [Link.], that there will be additional negotiations and the deal is expected to be signed in early January (at a ministerial level – not Xi and Trump). Lighthizer confirmed that China’s expectation is that there will be further phases and further reductions in tariffs, and he confirmed that the agreement will increase US Trade to China by USD 200bln over 2 years. (There will reportedly be a more detailed factsheet released this afternoon).
That all sounds awesome, right?
Well, to reach $40 billion next year, China would have to quadruple its US Agricultural imports!!
In 2018, China bought less than $10 billion in Ags from the US (and to reach $50 billion would mean to double the previous record high Ag exports)…
Notably, as @AgriTrends notes, to reach $50 billion… China could buy the entire U.S. soybean crop [with so many of its pigs dead now does China even need that much soybean?] for $36 billion, then what else?
And as China purchases from US have plunged, they have shifted demand to Latin America…
So Brazil will be very upset if this deal is actually fulfilled, and it will likely mean China breaking contracts with its new suppliers.
All of which explains two things:
Why Agricultural commodities are not screaming higher…
And neither are stocks, yuan, or copper, as investors appear to be discounting the rising probability of the Phase One Deal being busted within a few months as the “promised” purchases do not occur… and if that is close to the elections, it could well mean an ugly market reaction.
Source: Zero Hedge
NEVER CARED FOR BTHE MAN BUT IT WAS ABSOLUTELY ESSENTIAL THAT THE CUNT AND THE DEMS’ FAILED…HE HAD SOME GOOD IDEAS THAT HAVE SINCE BEEN DUMPED IN FAVOR OF THE DECADES OLD BULLSHIT
Why is this kind of language allowed on Checkpoint Asia? The writer of the above is obviously deranged and shows it in what he says and how he says it,
making this person quite unreliable as any kind of knower of anything except atrocious language to attempt at making a point. loser
What would you call H Clinton Mary E?…(we came, we saw, he died)…..go to your safe space mary.
Trump is getting desperate so his lies are more fantastic.
american school system fail, again. duh
Another ‘consider the source’ moment! Trump is a deranged and delusioal liar…
if you really want to know what the US and China agreed upon, as the Chinese, not that
dunderhead.