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Improving U.S.-China relations could bolster ag trade

The CEO of the U.S. Soybean Export Council says China’s panda gift is a goodwill gesture that signals an improvement in the U.S. and China relationship.

“They talk about panda dipolmacy and historically, as China allows foreign countries to display their pandas, they don’t do that if they aren’t getting along well with the country,” Jim Sutter tells Brownfield.

Few details have emerged from Thursday’s meeting between President Donald Trump and Chinese President Xi Jinping. Sutter says the high-level talks seem to be mostly about strengthening the relationship rather than negotiating individual trade issues.

He says improving relations can provide a better foundation for ag trade between the two countries.

“The very fancy event the president has done, the fact that they’re sending pandas, it’s telling me this relationship is on the uptrend, which is good.”

China has been on track to meet its 25 million metric ton soybean purchase commitment, and Sutter is optimistic China will fulfill the promise.

“I think, depending on how the crop develops in South America, and lots of other factors, it could go slightly higher than that.”

Sutter says China’s additional 10 percent tariff on U.S. soybeans continues to limit normal commercial trade, and he’d like to see that included in the bigger deal the U.S. is trying to negotiate after the two-month trade truce extension.

He’s watching for more details about U.S. ag trade, which could come from the Trump administration as soon as Monday.

“Is there an expectation the $17 billion ag purchases, that’s causing some friction these days. I think it will be important to hear about that.”

He says U.S. Trade Representative Jamieson Greer has already been talking about a board of trade mechanism, which could also have benefits for U.S. agriculture.