China wants the U.S. to first reduce the trade war tariffs currently in place for Chinese goods before it can proceed with the purchase of up to $50 billion worth of American farm products as part of a partial trade deal touted by President Donald Trump, Bloomberg News reported, citing sources familiar with the matter.
Washington and Beijing on Oct. 11 struck a "phase one deal" that includes $40 billion to $50 billion in new agriculture trade as well as provisions on intellectual property and financial services.
But the value of additional agricultural purchases that Chinese officials are willing to make is unlikely to meet the amount set in the partial trade deal under present circumstances, according to Bloomberg News' sources. New waivers for U.S. farm imports are also considered impractical for annual purchases of $50 billion, one of the sources added.
Chinese Foreign Ministry Spokesman Geng Shuang said Oct. 15 that Chinese firms will boost purchases of agricultural products, having bought 20 million tons of soybeans and 700,000 tons of pork so far in 2019.
The Bloomberg News report follows a statement from U.S. Treasury Secretary Steven Mnuchin that the two sides have reached a "fundamental agreement". However, China only confirmed "substantial progress" in the deal as it looked for further rounds of negotiations before a trade agreement could be signed in the sidelines of the Asia-Pacific Economic Cooperation summit in Chile in November.
The two countries will hold deputy level discussions this week and principal-level talks the next week, according to Mnuchin. While the October round of tariffs on China has been held off, the mid-December round of levies would be imposed if a deal is not reached, he added.