Trade talks with China are set to kick back up next week in Washington, D.C. After a year of tariff threats, an escalating trade war and struggling exports to China, bystanders are growing tired of watching the story play out.
However, positive developments surfaced this week, as Farm Journal Washington Correspondent Jim Wiesemeyer reported, Chinese leader Xi Xinping will visit the White House in June before the G20 Summit in Japan. The meeting could happen either the second or third week of June, signaling a trade deal with China could be close.
The news comes the same week that President Donald Trump threatened to walk away from negotiations with China if the two sides couldn’t come to an agreement by May, a move Wiesemeyer thinks is a negotiating ploy.
“I think that's mostly positioning when it comes to China,” said Wiesemeyer. “Things can come unraveled near the end, but I'm 98% in the category that a deal will get done. You always have to have a 2% Trump factor involved here, but I really think there's only a few things that remain to be done.”
He said one of the main hurdles both administrations still need to work through are tariffs. Not only will the two countries decide if tariffs should be reduced, but if the duties can be eliminated on major products.
“That probably can be handled in talks next week,” said Wiesemeyer. “China's going to bring about 100 people here. That tells me that they're very close to a final agreement that hopefully will get the tentative agreement of a meeting date for the two leaders.”
Both agriculture and traders seem to be immune to any positive news regarding trade talks with China. Tariffs were announced more than a year ago and some headlines have been premature in saying a deal is close to being done. However, Wiesemeyer says the slow process is the nature of negotiations.
“These are bureaucrats from both countries,” said Wiesemeyer. “When was the last time a bureaucrat was hasty? Never. So, give it time, give it time to bloom. It's spring time, this too shall flower into an agreement.”
Just last year, the White House was telling farmers and major agricultural groups to stop setting the bar too low when it comes to China. The Administration said instead of pushing a “do no harm mantra,” agriculture should be pushing to gain better market access than it had before. While the details of a potential trade agreement are unknown at this point, Wiesemeyer thinks it will be good for agriculture in the short-term, but he’s not certain it will solve the issues longer-term.
“Maybe short term, it’s better, but let's hope it continues,” he said. “China will always try to diversify the countries that they import from. I think that that's one of the downside impacts of these tariffs.”
Wiesemeyer said a trade deal with China should come to fruition soon, as Trump knows he needs to recover doubt by some rural voters. If a trade deal gets done, and the Trump Administration is successful in what Wiesemeyer calls an “early harvest, ag-only agreement” with Japan, trade policy could help start to push agriculture out of its current price slump.
“We're building the base to come out of the gutter, and we’ve been in a gutter,” he said. “I remember the 1980s like wet cement on my forehead; we're not as bad yet, but if we were to have another huge crop for both corn and soybeans, we could have some really tough times ahead. Trade policy could well lead us out into the higher prices and then you build from there.”
Wiesemeyer said as the storm clouds of falling commodity prices are evident today, he thinks sunny days are ahead, if the Administration can follow-through on what looks like promising, pending trade deals.
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