While Iowa isn’t known for its acres and acres of rice, farmers in the state are watching, with interest, the first purchases of U.S. rice by China. Is this a sign of things yet to come? Will this be a step in the right direction in improving trade relations?
Audio: World of Agriculture
It has been over six months since the United States instituted tariffs against Chinese goods. The Trump Administration has said these tariffs were imposed because of Chinese trade practices. U.S. trade officials have said it is all up to China when these tariffs can be rescinded. China imposed retaliatory tariffs of their own in response. U.S. officials have claimed these tariffs will not be considered legal in the eyes of the World Trade Organization. They claim while the U.S. imposed tariffs were in response to harmful trade practices, China’s response will not have a leg to stand on. That being said, we do have some positive news.
According to Chinese news reports, customs officials in the world’s second-largest economy have approved U.S. produced rice for import. Now before you get too excited, bear in mind there have been no concrete purchase numbers have been released. This gives us a similar feel to the trade cease-fire agreed to in December. When Presidents Trump and Xi reached their long-awaited agreement, all we knew was China planned to buy more Ag products. There were no solid numbers released then either. We have seen some purchases of soybeans since then, but no deliveries have been made at this time.
As for rice, breaking into the Chinese market is huge for American producers. Johnny Sullivan of Arkansas’s Producer Rice Mill, Incorporated, says China is a “monster market.” He continues, “That fact is based on the consumption rate of rice in China. The unreal part of the story is China could chew through the entire U.S. rice crop in 14 days.”
This news is a bright spot as leaders for both the United States and China will meet face to face later this week. Tensions are high, and any show of good faith between the world’s top two economies is certain to be a foundation which negotiators can begin to build on.