China Business Agreement on Natural Gas, Poultry and Beef Has Finalized

Cheryl Sanders
May 24, 2017

With the trade deal, the USA will allow Chinese chicken imports to come in. He said China is now the second largest consumer of beef in the world.

The deal is the first sign of progress on the 100-day action plan that Trump and Xi called for during their meeting at Trump's Florida estate in April.

"This administration has certainly made the agricultural community fairly nervous when it comes to its positions on trade", Dux said.

The White House announced last week that an agreement has been reached that will restore US beef access to China. The deal will also allow China easier access to the USA banking system and let American energy companies export LNG to China, most of which it now buys from Russian Federation. Tensions have been stoked by President Donald Trump's aggressive rhetoric against Chinese exports and barriers to US goods and investment.

Ross described the trade deal as marking a new high in the relations between the U.S. and China.

But a report by Capital Economics consultancy saw "paltry trade benefits" from the deal because it would amount to "just a few billion dollars".

In Beijing, Vice Finance Minister Zhu Guangyao told reporters the early results of the agreement showed that economic collaboration between the two sides "couldn't be closer". Previous administrations have hailed market-opening agreements only to be left disappointed. It will increase the demand for US beef. The U.S. involvement in Xi's so-called "One Belt, One Road" program suggests that Trump is attempting to improve relations despite his anti-China rhetoric during the presidential campaign. He's argued that America's perennial trade deficits have cost millions of factory jobs and pledged to take a tougher stance in trade negotiations to lower the imbalances.

"United States is to publish a proposed rule by July 16, 2017, at the latest, with the United States realizing China poultry exports as soon as possible", said the release.

"We have been anticipating this announcement and have already been working to build key partnerships in China for Nebraska beef", said Nebraska Department of Agriculture (NDA) Director Greg Ibach.

China is turning more to natural gas as a way to reduce its dependence on coal and combat the country's extensive air pollution.

Though prices will likely decline in the fall as more cattle come to market, prices will be starting at a higher level, hopefully staying up above the dismal lows seen in October.

It's been almost 14 years since China banned imports of USA beef following the December 23, 2003 announcement that a Holstein cow had been diagnosed with BSE. The impact of this change on the USA poultry industry is uncertain, but Ross said it would not be severe. "Companies from China may proceed at any time to negotiate all types of contractual arrangement with the US LNG exporters, including long-term contracts, subject to the commercial considerations of the parties", he said.

US Commerce Secretary Wilbur Ross said the initial agreement, which would also open up the Chinese market to US electronic payment services companies and help Chinese banks gain broader access to the US financial market, would help "bring down" the US trade deficit with China, though he did not provide a precise estimate.

Candidate Trump promised to label China as a currency manipulator and slap a 45% retaliatory tariff on the country's exports. The deficit with China represented about 60 percent of the country's total deficit a year ago of $500.6 billion. The two sides may extend the plan from 100 days to one year. The Obama administration continued that effort but reduced the frequency of the talks to once a year.

"We are excited about USA trade policies and I think you probably saw we made an announcement of a 100 day economic plan with the Chinese so I think we're very happy with how were proceeding with the Chinese", Mnuchin said.

"The U.S. economy is not fundamentally based on Wall Street and farms, it's based on advanced industries".

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