Headlines:
China Has Agreed to Buy Up to $1.2 Trillion in U.S. Goods
U.S. President Donald Trump said on Friday that there was a very good chance the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 deadline to reach an agreement. U.S. and Chinese negotiators had made progress and would extend this week’s round of negotiations by two days, Trump told reporters in the White House as he met his top negotiators and their counterpart, Chinese Vice Premier Liu He. “I think that we both feel there’s a very good chance a deal will happen,” Trump said. Extending the deadline would mean Trump would put on hold a scheduled increase to 25 percent from 10 percent on $200 billion of Chinese imports into the United States. That would prevent a further escalation in a trade war that has already disrupted commerce worth hundreds of billions of dollars of goods, slowed global economic growth and roiled markets. Optimism the two sides would find a way to end the trade war lifted stocks on Friday, especially technology shares, while oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. Trump and Treasury Secretary Steven Mnuchin said the two sides had reached a strong agreement on currency. The president said he expects to meet China’s leader, Xi Jinping, soon, and the biggest trade decisions could come when they meet.
U.S. Farmers Receive $7.7 Billion in Help to Date, USDA Official Says
The U.S. Department of Agriculture has paid out $7.7 billion so far to help farmers who were hurt by retaliatory tariffs imposed by China, a senior agency official said on Friday. The Trump administration has pledged up to $12 billion in aid to help offset losses for crops hit by the Chinese tariffs imposed in response to Washington’s tariffs on Chinese goods. Speaking at the USDA annual forum, Bill Northey, undersecretary for farm production and conservation, said “$7.7 billion has gone into farmers’ bank accounts now.” China targeted U.S. farmers with the tariffs after U.S. President Donald Trump imposed duties on $250 billion worth of Chinese goods last year as part of his vow to cut the U.S. trade deficit with China. Beijing slapped a 25% tariff on U.S. soybeans in retaliation, effectively shutting down U.S. soybean exports to China, worth about $12 billion last year. With China typically taking about 60% of U.S. supplies, the loss of that export market left farmers struggling with a big inventory. USDA has repeatedly said it will not have an aid package for 2019. Secretary of Agriculture Sonny Perdue said on Thursday that farmers will do their planning for the year based on market conditions.
Summary:
Soybeans and grains closed Friday little changed as investors await news from the latest round of trade negotiations between the US and China. Talks between the world’s two largest economies started yesterday in Washington and will continue throughout the day. Chinese Vice Premier Liu He will reportedly meet with President Donald Trump at some point. Media reports Thursday indicated the sides are close to a deal that would end the months-long trade war between the countries, and the US is reportedly drafting memorandums of understanding that covered key items such as agriculture, intellectual property, and technology transfer. China has agreed to purchase up to $1.2 trillion in U.S. goods as part of the negotiations, CNBC reported. Still, an agreement isn’t expected to be signed this week, and it’s still unclear whether Trump will extend the March 1 deadline for a deal. The White House has said it will raise tariffs on Chinese goods to 25% from their current level of 10% if an agreement isn’t signed by the start of next month.
