Published: Fri, July 12, 2019
Economy | By

China says USA trade issues are 'definitely' resolvable

China says USA trade issues are 'definitely' resolvable

Trump and Xi agreed to a tentative pause in raising tariffs after their meeting in Osaka, though varying readouts and vague comments from Trump have sown confusion about what was actually agreed on in the room.

China has started preparing to buy farm products, including gauging the prices of USA soybeans, but will not purchase large amounts until it sees concrete progress in the negotiations, a person familiar with the matter said Friday.

"And while the truce reached between [presidents] Trump and Xi at the G20 late last month removes the immediate threat of further USA tariffs, our base case remains that trade talks will break down again before long".

"Our base case remains that trade talks will break down again before long", said Julian Evans-Pritchard of Capital Economics in a report.

China's June exports are expected to have declined 2 percent from a year earlier, according to the median estimate of 34 economists in a Reuters poll, compared with a 1.1% gain in May.

Trade weakness has added to pressure on Xi's government to shore up economic growth and avoid politically risky job losses.

In addition to opposing sharp-elbowed Chinese tech policies, the United States wants Beijing to buy more USA products and to narrow America's trade deficit with China - a record $381 billion a year ago. The Chinese commerce ministry said in a brief statement that the two sides exchanged "opinions on implementing the consensus reached between the two countries' heads of state in Osaka". He said that Beijing is causing a disappointment. "Having said that, we have a very strong - I want to underscore this - a very strong expectation that China will really shortly, maybe immediately, begin to purchase USA agricultural products", he told the United States broadcaster.

Trump accused Beijing on Thursday of backsliding on promises to buy more American farm goods. Trump said on Twitter.

China's economy is likely to turn in its lowest economic growth numbers for the last 30 years in 2019, while one of China's leading exporters indicates the tariff war is taking a heavy toll on Chinese manufacturers as firms seek to move production to other nations to avoid the tariffs.

Importers of American soybeans and other goods are trying to switch to Brazilian, Russian and other sources, but supplies are limited and costs are higher.

Imports are expected to have fallen for a second straight month, pointing to continued weakness in domestic demand and highlighting the need for Beijing to roll out more economic support measures.

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