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U.S. customs data shows Beijing purchased $3.1 billion of U.S. agriculture during the first three months of the year, well shy of the quarterly amount required to reach the $50 billion a year promised in the January agreement. China's data suggests the purchases, which were limited by the COVID-19 pandemic, reached $5 billion.
“While things are moving in the right direction on the purchase side, they need to accelerate,” John Newton, chief economist at the American Farm Bureau Federation, told FOX Business. He said that farmers are “scratching their heads a little bit” after Beijing bought a record amount of soybeans from Brazil in April.
The historic trade pact with the U.S. called for Beijing to purchase an additional $200 billion worth of American products over the next two years, in addition to commitments to halt intellectual property theft, refrain from currency manipulation and cooperate in financial services.
Aside from the agriculture-purchase commitments, Beijing promised to purchase an additional $40 billion in services, $50 billion in energy and up to $80 billion of manufacturing products. The U.S., for its part, reduced tariffs imposed by the Trump administration on some goods but kept duties on $375 billion worth of merchandise.
Speculation is mounting that the phase one deal is on increasingly shaky ground as U.S. relations with China sour amid complaints by Washington about Beijing's initial handling of the COVID-19 pandemic as well as its attempt to tighten its grip on Hong Kong.
Just two or three months ago it “seemed like the tensions between China and the United States were going to ease,” Stephen Moore, former adviser to President Trump and an economist at the conservative-leaning Heritage Foundation, told FOX Business’ Neil Cavuto. “Of course, that has totally deteriorated as a result of China's actions.”
COVID-19, which was first identified in Wuhan, China, in late December, has infected more than 1.6 million Americans and killed 96,000 while inflicting trillions of dollars of economic damage as government leaders issued stay-at-home orders to slow the spread of the virus.
Trump said on Tuesday that he feels “very differently” about the phase one agreement since the virus’ outbreak.
Chinese Premier Li Keqiang tried to calm the situation at the National People’s Congress on Friday, saying that Beijing will “work with the United States” to implement the deal.
However, during that same address, Beijing further escalated tensions by announcing a national security bill that would bypass Hong Kong’s legislature, effectively ending the “one country, two systems” principle used to govern the city.
Moore said the U.S. and China have “been in a Cold War” for the past few years and that he believes the situation is “turning a little hotter now.”
The farm bureau’s Newton said COVID-19 has caused “one of the most devastating demand shocks” American farmers have seen in some time and that the administration’s $16 billion aid package will help them “bridge the gap” to the other side of the coronavirus.
At this point in time, U.S. farmers have to hope the Chinese continue to “live up to their phase one commitments,” Newton said.