China reportedly halts US soybean purchases as trade war escalates
China, the world’s biggest buyer of soybeans, reportedly halted purchases of U.S. supplies as the tariff war between the world’s two biggest economies continues to escalate.
Chinese buyers have stopped ordering -- and don’t expect to do so anytime soon, given the inflamed tensions between the U.S. and China, according to Bloomberg, which cited people familiar with the matter. China does not have plans to cancel its previous purchase of American soybeans, however, Bloomberg reported.
Beijing is the biggest buyer of U.S. soybeans, importing more than $12.4 billion worth of the oil seed in 2017, according to the Peterson Institute for International Economics. President Trump earlier this month announced $16 billion in aid for U.S. farmers to help offset the cost of the trade war.
Last year, as a result of the tariffs, soybeans in storage totaled about 3.74 billion bushels, up 18 percent from the prior year, according to data from the USDA. But according to Bloomberg, China bought about 13 million metric tons of U.S. soybeans after the countries agreed to a truce in December.
U.S. Agriculture Secretary Sonny Perdue also said in February that China pledged to buy 10 million tons of American soybeans, although data reveal that China still needs to take 7 million tons.
China could replace its U.S. supply with soybeans from Brazil, Bloomberg reported.
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Trade tensions between the two countries began to heat up again several weeks ago, when Trump increased the tariffs imposed on $200 billion of Chinese goods to 25 percent from 10 percent. China retaliated by hiking its tariffs on about $60 billion worth in U.S. imports.