China makes first big US soybean purchase since Trump-Xi truce

China makes first big US soybean purchase since Trump-Xi truce

China makes first big US soybean purchase since Trump-Xi truce

"The ones that produce in the USA are definitively complaining about rising raw material prices", said Metzler analyst Juergen Pieper. It may actually matter more to foreign automakers with factories in the US than for Ford and General Motors (GM).

But tariffs on USA soybeans and ongoing trade war caused the amount of soybeans heading to China to drop to almost zero, despite October and November typically representing the peak season. Currently, US$50 billion worth of Chinese goods are already taxed at 25%.

Shares in auto companies, including BMW, rose on the reports.

American farmers, especially soybean farmers, have been hit hard by China's retaliatory tariffs.

China has reportedly proposed cutting tariffs on US-made cars to 15%, the same tax levied on auto imports from other countries.

Equities trading has been especially choppy in the past few days amid headlines on topics ranging from China trade and a potential US government shutdown to Brexit uncertainty.

Skepticism also remains over the impact on the soybean market, as the imports are likely to be made by state-owned enterprises while Chinese commercial buyers that typically buy more are still hampered by tariffs.

The purchase of more than 1.5 million tonnes of beans is the most concrete evidence yet that China is making good on pledges the USA government said Xi made when the two leaders met on December 1 and agreed to a 90-day detente to negotiate a trade deal.

"I've heard rumors that they're going to buy our beans and put them in reserve, but I don't see ships sitting in our ports to haul them to China yet", said John Heisdorffer, an Iowa soybean grower and chairman of the American Soybean Association, on Wednesday.

US President Donald Trump, in an interview with Reuters, said trade talks were under way with China.

From 2011 to 2018, more than 90 per cent of the DOJ's cases alleging economic espionage by a state have involved China, and more than two-thirds of trade secret thefts have a nexus to China, Assistant Attorney General John Demers said.

Growing concerns that the trade war will increasingly hurt corporate earnings and the US economy are a key reason why USA stock prices have been sinking this fall.

He is also facing pressure from financial markets, which have been roiled in recent weeks by concerns over the effects a worsening trade war between the world's two largest economies would have on global growth. China's decision came amid a period of heightening tensions between the US and China over trade and intellectual property issues.

German automakers have been getting hit particularly hard from both sides of the worldwide trade war. While China has been playing down "Made in China 2025" since tensions flared, it has been pushing ahead undaunted with its state-driven industrial policies, Lighthizer's office said in a report last month.

Commodities traders and analysts said soybean prices may struggle to build on Wednesday's gains unless China buys considerably more soybeans.

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