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Some skepticism remains over preliminary deal with China

Trump touts surge in farm purchases

OMAHA, Neb. — President Donald Trump likes to joke that America’s farmers have a nice problem on their hands: They’re going to need bigger tractors to keep up with surging Chinese demand for their soybeans and other agricultural goods under a preliminary deal between the world’s two largest economies.

But will they really?

From Beijing to America’s farm belt, skeptics are questioning just how much China has actually committed to buy — and whether U.S. farmers would be able anytime soon to export goods there in the quantity that Trump has promised.

It amounts to $40 billion a year, according to Trump’s trade representative, Robert Lighthizer. If you ask the exuberant president himself, though, the total is actually “much more than” $50 billion. To put that in perspective, U.S. farm exports to China have never topped $26 billion in any one year.

What’s more, since Trump’s trade war with Beijing erupted last year, China has increased its farm purchases from Brazil, Argentina and other countries. As a result, Beijing may now be locked into contracts it couldn’t break even if it intended to quickly increase its purchases of American goods to something approximating $40 billion.

“History has never been even close to that level,” said Chad Hart, an agricultural economist at Iowa State University. “There’s no clear path to get us there in one year.”

“The figure of $40 billion,” added Cui Fan, a trade specialist at the University of International Business and Economics in Beijing, “is larger than I expected, and I wonder whether the United States can ensure the full supply of the products.”

America’s farmers would surely like to. The farm belt has endured much of the impact from Beijing’s retaliatory tariffs since July 2018, when the Trump administration imposed taxes on $360 billion in Chinese imports. Beijing struck back by taxing $120 billion in U.S. exports, including soybeans and other farm goods.

The impact from China’s retaliatory tariffs was substantial: U.S. farm exports to China, which hit a record $25.9 billion in 2012, plummeted last year to $9.1 billion. Soybean exports to China fell even more — to a 12-year low of $3.1 billion, according to the Department of Agriculture. (Farm imports to China have rebounded somewhat this year but remain well below pre-trade-war levels.)

Under the preliminary U.S.-China deal, Trump suspended his plan to impose new tariffs and reduced some existing taxes on Chinese imports. In return, Lighthizer said, China agreed to buy $40 billion a year in U.S. farm exports over two years, among other things. (Beijing also committed to ending its long-standing practice of pressuring foreign companies to hand over their technology as a condition of gaining access to the Chinese market.)

Many farmers say they’re hopeful but restrained in their expectations.

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