Chart of the Day: China’s U.S. Agriculture Purchases Hit Record Highs
China is accelerating its agriculture purchases from the U.S. with imports of several goods at all-time highs. The U.S. government hailed the deals as “historic results for American agriculture” despite mounting animosity between the world’s two largest economies.
As of October, China had bought over $23 billion in U.S. agricultural goods this year, or about 71% of the annual target set under the two countries’ phase one trade agreement, according to a report released by the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA). As part of the trade deal, China promised to increase its purchases of U.S. agricultural products by $32 billion over the following two years from a 2017 baseline.
The $23 billion figure, which includes purchase contracts that have not yet been completed, indicates that the U.S. is likely to achieve its best-ever annual sales of agricultural goods to China this year, according to the report.
Sales of U.S. corn, soybeans and pork to China all saw record highs this year, with pork exports hitting an all-time record in just the first five months, the report said. Chinese officials have also encouraged grain traders to import more from the U.S. to help the government meet its commitments, industry insiders told Caixin.
In terms of actual imports in the first nine months, however, China’s agricultural purchases had only reached about half of the year-to-date target. Through September, it imported $12.9 billion from the U.S. this year, lagging far behind the supposed goal of $25 billion for the period which enables it to meet the 2020 annual target of $36.6 billion, according to Chad Bown, a senior fellow and trade policy expert at the Washington-based Peterson Institute for International Economics.
The U.S. report comes on the eve of the country’s presidential election. U.S. agriculture plays a larger political than economic role, according to Bown. While threatening further decoupling from Beijing, U.S. President Donald Trump’s administration has worked to keep the trade deal intact, which allows him to “shore up electoral support from crucial agriculture-dominant states,” said Joel A. Gallo, CEO of Columbia China League Business Advisory Co., a Guangzhou-based management consulting firm.
“Since the agreement entered into force eight months ago, we have seen remarkable improvements in our agricultural trade relationship with China, which will benefit our farmers and ranchers for years to come,” said U.S. Trade Representative Robert Lighthizer.
While blaming China for “unfair trade practices” that put U.S. farmers on an uneven playing field, the USTR and the USDA said in a joint statement they will continue to ensure the trade agreement is “fully and properly implemented” so that market access for U.S. food and agricultural products can continue to expand moving forward.
Contact editor Gavin Cross (email@example.com)
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