China makes first major US soybean purchases since Trump-Xi meeting

Traders work on the floor of the New York Stock Exchange in New York U.S

China has agreed to cut tariffs on US -built cars and auto parts to 15 percent from the current 40 percent, a Trump administration official said told Reuters on Tuesday, setting the stage for a new talks aimed at easing the bitter trade war between the world's two largest economies.

The latest United States moves follow debates within the Trump administration about imposing sanctions on Chinese entities caught stealing USA intellectual property through cyber attacks, three people familiar with the matter said.

Citing industry sources, the U.S. soybean council said state-owned firms from China are stocking up their purchases in the product, and the shipments are expected to take place before March next year. Articles appear on euronews.com for a limited time.

"The shipments, mainly from the Pacific Northwest, will help reduce stockpile pressures for US soybean farmers", said Li Qiang, chief analyst with Shanghai JC Intelligence Co.

Trump approved tariff hikes of 25 percent on $50 billion of Chinese goods and 10 percent on another $200 billion of imports in response to complaints Beijing steals or pressures companies to hand over technology.

The truce, reached after a dinner of more than two hours Saturday, buys time for the two countries to work out their differences in a dispute over Beijing's aggressive drive to supplant USA technological dominance. But the world's top importer has purchased little since Beijing slapped steep tariffs on US shipments on July 6 in retaliation for duties on Chinese goods. The strategy is core to China's aim to transform itself into a global superpower by 2050, and rival US dominance in sectors such as semiconductors, robotics, aerospace, clean-energy cars and artificial intelligence.

Stock markets aroused on Wednesday as U.S. President Donald Trump sounded energetic about an economic agreement with China, while sterling rose off multi month lows as Prime Minister Theresa May promised to battle a test to her initiative. "However this approach is making China think twice about their hard stance", said Ernesto Ramos, Managing Director of Active equities for BMO Global Asset Management in Chicago.

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Soybeans got an early boost after Trump said China was back in the market buying US beans. While there are other factors that have influenced this decline, a major contributor has been the ongoing trade war between China and the US.

The lack of sales has left United States farmers in a rough spot. "Any business that we can put together we're pretty grateful for".

Commodities traders and analysts said soybean prices may struggle to build on Wednesday's gains unless China buys considerably more soybeans.

The 25 percent tariff on USA soybeans Beijing imposed on July 6 remains in effect. The country uses the beans as feed for the large number of hogs in China and had been relying on producers like Brazil and Argentina to meet the shortfall. Brazil will start harvesting its next crop in early 2019 - leaving a window for the U.S.to sell.

"I think they're looking to do it immediately, very quickly", he said in the interview.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. This article is strictly for informational purposes only.

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