China Resumes Soybean Purchases | Financial Buzz

China Resumes Soybean Purchases

One of the biggest casualties of the trade war, and a large support base for the President, is farmers. Soybean farmers have been suffering ever since China had put a 25% tariff on the crop in July. Now, it looks like the Chinese market is opening up their market to American soy with the purchase of over 1.13 million metric tons of soybeans on Wednesday. State owned grain stockpiler, Sinograin was one of the Chinese companies involved with this new purchase.

 The trade comes after Trump and Xi Jinping had agreed to a tariff cease-fire for 90 days, on Dec. 1 at the G20 summit. Historically, China is the main consumer of American Soybeans, but with the tariffs imposed, as retaliation for duties placed on Chinese goods by the United States, the exports had dropped from 21.4 million tons, over a 10 month period in 2017, down to to 8.2 million tons in the same time period.

With the resumption of soy trade, American farmers can breathe a sigh of relief knowing that their product will be able to leave the silos as there is promise China will continue to buy the crop into 2019. This also signals that relations between the United States and China will improve and lead to the reduction of auto tariffs that had been previously stated by Trump in a tweet.