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Chinese firms looking into buying US farm goods

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A farmer holds soybean from the 2018 harvest at her farm in Scribber, Nebraska. AFP

BEIJING (Reuters) – Chinese companies have started to inquire about prices for US agricultural goods purchases, Beijing said yesterday, in a further sign of potential de-escalation in the bitter and protracted trade war between the world’s two largest economies.

The move comes before a planned meeting in early October between top US and Chinese trade negotiators in Washington aimed at easing a trade conflict that has disrupted global supply chains and rattled financial markets.

On Wednesday, Beijing and Washington both made concessions on planned tariffs, helping lift global stocks as well as China’s yuan currency.

Speaking at a weekly news briefing in Beijing yesterday, Chinese Commerce Ministry spokesman Gao Feng said China welcomed the US move.

“According to my understanding, Chinese firms have started to inquire about prices for US agricultural goods. (China) hopes both sides would continue to meet each other half way and adopt concrete actions to create favorable conditions for negotiations,” Mr Gao said.

Possible purchases of US farm goods included pork and soybeans, Mr Gao said, both of which are still subject to hefty Chinese duties.

Despite tariffs of 62 percent in place since last year, US exports of pork to China jumped 51 percent in the first seven months of 2019 over last year to 240,000 tonnes, according to the US Meat Export Federation.

In July alone, the United States exported about 3,000 containers, or almost 61,000 tonnes of pork, as buyers stepped up purchases amid a huge shortfall in China due to a massive outbreak of African swine fever that has driven prices to record levels.

China reduced purchases of US farm products in August, after US President Donald Trump vowed to impose new tariffs on around $300 billion of Chinese goods, blaming Beijing for not having fulfilled a promise to buy large volumes of US farm products and abruptly dimming prospects of a trade deal.

Mr Gao said working-level teams from both countries would meet soon to prepare for the next round of top-level talks between Chinese Vice Premier Liu He, and US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

On Wednesday, the United States agreed to delay increasing tariffs on $250 billion worth of Chinese imports from Oct. 1 to Oct. 15 “as a gesture of goodwill.” The tariffs on those goods were set to increase to 30 percent from 25 percent.

Earlier on Wednesday, China announced it was exempting 16 types of US products from tariffs, including some anti-cancer drugs and lubricants, as well as animal feed ingredients whey and fish meal.

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