In a quiet admission of food dependency, China purchased 600,000 tonnes of soybeans yesterday (link), and simultaneously announced that U.S. pork and soybean imports would be exempt from further tariff increases.
The surface message Beijing is selling, surrounds their magnanimous panda narrative of reaching out to diminish trade friction. However, below the surface everyone knows China cannot feed itself,and if food prices keep rising they could likely have growing unrest.
Beijing’s decision to not enhance tariffs of pork and soybeans is very self serving; particularly because China owns Smithfield foods, the largest producer of U.S. pork. In essence China has lessened tariffs against their own company.
(SCMP) China has announced that it will exclude imports of US soybeans, pork and other farm goods from additional trade war tariffs, opening the door for significant purchases of agricultural products.
The official Xinhua News Agency reported on Friday that China’s National Development and Reform Commission and the Ministry of Commerce made the exemption in response to the US’ decision of postpone an increase in the tariff rate on $250 billion of Chinese goods from October 1 to October 15.
It comes after US President Donald Trump spoke on Thursday of the possibility of an “interim trade deal” over the coming weeks.
Beijing will allow Chinese businesses to purchase a “certain amount of farm products such as soybeans and pork
” from the United States, according to the Xinhua report. “China’s market is big enough and there’s great potential to import high-quality US farm products.” (read more)
Now we can see why Vice-Premier Liu He asked President Trump to postpone the tariffs on Chinese products from October 1st to October 15th.
Manipulative panda needed the two-week delay as the basis for a face-saving move.
Likely Beijing was already going to make the bean purchases and exempt the pork products etc. China has no choice, they need the food. However, making the purchase as a stand alone would make them appear weak…. So Beijing asks President Trump for a two-week delay,… then they make the purchase,…. and then they position the purchase as a response to the two-week delay.