American farmers can breathe a sigh of relief... for now. White House trade policy adviser Peter Navarro said China has re-entered the U.S. market for soybeans.
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“Prior to our tariffs going on China began not buying our soybeans as a way of retaliating against us,” he said to FOX Business’ Maria Bartiromo on Thursday.
However, exiting the market can have economic consequences for China.
“If they don’t buy the soybeans they get inflation. If they get inflation they get riots,” he noted.
Navarro offered limited details on the size of the purchase which is speculated to be around 500,000 tons of soybeans, according to Reuters. It is the first major buy since President Trump met with President Xi Jinping at G20 summit, where the two world leaders reached a 90-day truce.
China is the hog capital of the world and the largest buyer of U.S. soybeans. The country consumes 50 percent of the world’s pork, which is fed by soybeans.
American farmers could produce the largest crop on record this year, according to the USDA, which expects China to import 90 million tons this month. There are fears that farmers would be sitting on stockpiles of the commodity, if the trade war rages on.
Navarro added that the China-U.S. trade story is more than just market access – intellectual property theft remains a sticking point.
“If we lose our technological base, the Chinese espionage in Chinese state directed investment, we're not going to have a country,” he said. “And so this is a historic moment.”
Trump agreed to withhold raising tariffs from 10 percent to 25 percent on $200 billion worth of imports from China. China has until March 1 to reach a deal.