Even the US government is forecasting that China will fail to deliver on their trade deal promises to Trump
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The federal government is projecting that China will buy $US14 billion of American agricultural products for the upcoming fiscal year, an amount that would miss the ambitious target laid out in the Trump administration’s interim trade deal.
New data released from the Department of Agriculture on Thursday boosts its initial estimate by $US3 billion. That’s the result of a new short-term agreement between the US and China as both sides attempt to rewrite trade terms comprehensively.
But it falls far short of the Trump administration’s outlook that China will purchase $US40 billion of US farm goods in the first year of the agreement – an amount it hasn’t come close to in the past decade.
Last month, the Trump administration signed a “Phase One” trade deal with China that cooled trade tensions between the world’s two largest economic powers and rolled back some tariffs imposed on Chinese goods. But the US still left $US360 billion of them locked into place.
Under the agreement, China would buy $US200 billion of US goods and services over the next two years. The amount of purchases would gradually continue scaling upward. Still, analysts were sceptical of the deal’s terms.
“We think it is highly challenging for China to import $US200 billion more goods and services from the US over the next two years without reducing imports from elsewhere,” UBS analysts said in January.
The development could also further hurt farmers who have lost billions in agriculture sales to China as a result of the trade war.
Agriculture secretary Sonny Perdue said in late January that with Beijing expected to ramp up purchases, it’s no longer necessary to extend the lifespan of a bailout program for farmers, Reuters reported.
This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.