China will need to drop its steep tariffs imposed on a range of American farm products earlier this year before it can fulfill its pledge to buy a “very substantial” amount of U.S. goods, said Chinese traders on Monday.
Reuters reports China and the United States agreed on Saturday to refrain from setting additional tariffs that would further escalate a months-long trade war.
The U.S. said that Beijing had promised to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, with purchases of farm goods to start “immediately."
But no substantial purchases can happen with a 25% duty still in place on U.S. soybeans, corn, sorghum and wheat, said buyers and analysts.
Reuters reports some said China could soon scrap its tariffs to show commitment to the trade truce. The foreign ministry said on Monday that the Chinese and U.S. presidents had instructed their economic teams to work towards removing all tariffs.
Until then, the only buyers likely to make purchases of pricey U.S. grain will be state-owned enterprises instructed by Beijing to buy soybeans for state reserves.
Read the full report at Reuters.
