U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are in China this week for the first high-level, face-to-face discussions since trade talks broke down in May. The Chinese government permitted several domestic companies to purchase U.S. agricultural products without tariffs. People familiar with the situation tell Bloomberg that the companies will buy U.S. cotton, corn, sorghum, and pork without facing the extra costs of the tariffs. Some textile mills have permission to buy a total of 50,000 tons of U.S. cotton without the 25 percent duty. The total amounts of the corn, sorghum, and pork purchases weren’t available. The move follows the approval for purchasing three million tons of U.S. soybeans last week Bloomberg says there could be a second round of exemptions, depending on how trade talks progress.
In a press conference last week, China’s commerce ministry said companies are willing to buy U.S. farm products, but only in line with domestic demands, and the purchases are their own decisions. A ministry spokesman says there are no direct connections between purchases and the resumption of trade talks.
Lighthizer told Agri-Pulse last week that a delegation from Japan will be in Washington this week for trade negotiations. The talks are scheduled to get underway on Thursday, August 1. Lighthizer is expected to be back in Washington for talks with the Japanese after he returns from China. Japan and the U.S. had been talking earlier this year, but those talks were suspended due to elections in Japan, which have now taken place. U.S. agriculture couldn’t be more excited about the possibility of a trade deal with Japan, which buys a substantial amount of American pork, wheat, dairy, wine, along with fruits and vegetables.
Japan was prepared to lift tariffs on U.S. agricultural products when America was part of the Trans-Pacific Partnership Agreement. Some of America’s main competitors, such as Australia and Canada, who remained in the pact, are now enjoying the benefits of reduced tariffs. Japan has also cut tariffs on goods from the European Union, another chief competitor of America, as the two nations recently reached a free trade deal of their own. Japan is the fourth-biggest market for U.S. agricultural exports.