China trade deal signing planned for Jan. 15

Few details available for deal that could include purchases of up to $50 billion in U.S. agricultural products.

Jacqui Fatka, Policy editor

January 2, 2020

2 Min Read
US and China flag mashup

President Donald Trump said in a tweet he will be signing the “very large and comprehensive phase one trade deal with China" at a ceremony Jan. 15 that will take place at the White House with high-level representatives from China present. The signing will occur nearly a month after the deal was reached to hold off ratcheting up tariffs with China that originally were scheduled to start Dec. 15.

Since the trade war began, China went from the second-largest market for U.S. agricultural products to the fifth largest. “Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet,” American Farm Bureau Federation (AFBF) president Zippy Duvall said following the deal announced Dec. 13.

AFBF economist Veronica Nigh is hopeful that the phase one deal leads to a more expansive agreement between U.S. and China. Trump’s tweet added that he will be going to Beijing, China, at a later date, where talks will begin on phase two.

Nigh said China has reportedly agreed to increase its purchases of U.S. agricultural products over a two-year period, averaging $40-50 billion annually. In comparison, China purchased $24 billion in 2017, before the trade war started. U.S. officials stated that the deal will include additional purchases of U.S. farm products of at least $32 billion over two years.

Related:China phase one deal reached

“Given that’s such a large expansion over where we were previously, the list of products and the variety of trade between China and the U.S. would have to expand pretty significantly. When you look at the total of what China is buying from the rest of the world, there’s probably room there,” Nigh said.

Shanghai, China-based consultancy JCI estimates that China can buy a total of roughly $41.3 billion worth of U.S. farm products annually, including around $18.7 billion -- or 45 million metric tons -- of soybeans. JCI expects another $2.1 billion to come from 1 mmt of frozen pork and offal imports, while sorghum, corn and distillers grains imports will reach about $1.8 billion each.

Although reports indicate that fully one-third of the 86-page agreement discusses agriculture, few details are available to the public. “After the official signing of the deal, the content of the agreement will be made public,” China's Ministry of Commerce spokesman Gao Feng said.

Senate Finance Committee chairman Chuck Grassley (R., Iowa) said the deal's “texts are still being translated, and we've got to know that they say what was agreed to before we talk."

Related:U.S. pork can reduce U.S. trade deficit with China by nearly 6%

The deal will go into effect 30 days after the signing.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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