We all anticipate the signing of the Phase 1 trade deal between the United States and China. This marks the first step forward in a trade war that has waged for over 18 months. However, don’t count your chickens before they are hatched. Because even if they do hatch, there’s no guarantee they will be getting shipped to China.
According to estimates, the Phase 1 deal includes $40 – 50 billion in purchases of U.S. agricultural products annually for the next two years. This may be a tough pill to swallow, but American Farm Bureau Federation Economist Veronica Nigh says some are questioning how China will be able to make this happen.
Nigh reminds us that China is a big player in the global marketplace. They purchase goods from all over the world. We need to realize we are going to have to compete with other countries for these market increases. This is because China says these purchases will be market-based moves.
China made $124 billion in Ag purchases in 2018 alone. These products came in from all over the world. These are mainly in soybeans, dairy, fruit, beef, and prepared foods. Veronica Nigh says the United States has strong global competition in all these areas.
The Phase 1 deal is set to be signed on Wednesday in the White House.