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Economist concerned if China will live up to trade deal

An ag economist says China has a long way to go in a short period of time if they’re going to live up to the Phase One trade deal with the U.S.

Dan Basse with AgResource told the Wisconsin Bankers Association Wednesday ag sales to China have been very disappointing. “It’s a pittance. It’s less than last year. If they made this pledge, then the question becomes is China really going to keep it’s deal of the bargain, or is China just trying to buy its way into the election to see who is the next President, and then we’ll deal with whatever fallout that is.” That has him questioning if the Phase One trade deal will crumble before the U.S. elections.

Basse says in 2002, China promised to buy 16.8 million metric tons of corn and wheat to join the World Trade Organization and those numbers were never reached.  “You’ve got to remember historically when China signs trade agreements, let’s just be honest.  They lie.”

Basse says, “They should be buying two million tons of soybeans a week, which is somewhere in the vicinity of 80-million bushels a week. Today, we’re seeing a number probably closer to like two or three million bushels. They need to step it up substantially.”

Basse says U.S. corn is about half the cost of Chinese corn, but they will not import much because paying 500-million Chinese farmers the higher price keeps their farmers on the farms.  He told the bankers, “We’ve been in a trade war with China going back to June of 2018, for two years now, and so far the only beneficiary has been Brazil.”

Basse appeared before the Wisconsin Bankers Association conference in Wisconsin Dells, Wisconsin.

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