China currently has to walk a difficult tightrope. On the one hand, the government in Beijing wants to commit to extensive agricultural imports from the US, while on the other hand it has to keep the rural population happy, which fears a drop in prices for their products if the market is flooded with imports.
The US chief negotiator for the bilateral trade agreement with Beijing, Robert Lighthizer, said in December that China will import an additional USD 32 billion worth of agricultural products from the US over the next two years. That would be USD 16 billion per year more than in 2017.
The deputy minister of agriculture in China, Han, who was also involved in the negotiations, confirmed that more US wheat, rice and corn would be purchased. The import quotas, which have an import duty of 1%, are to be used for this purpose. However, these quotas will apply to all supplier countries and not just the USA.
In 2017, i.e. the year before the trade dispute, China purchased these three agricultural commodities from the USA to the value of USD 534 million. Farmers on the local market are now speculating that imports will have to rise so sharply that the local market will collapse.
Source
HANSA Terminhandel
