Market News & Headlines >> U.S.-China agreement doesn't change status quo
An informal agreement between U.S. and Chinese leaders over the weekend provides a little psychological relief for agriculture, but for now the status quo appears to remain in place.
The two sides, led by President Trump and Chinese President Xi Jinping, agreed to a “ceasefire” with no new tariffs for a period of three months. This agreement starts Jan. 1, when some U.S. tariffs in place on Chinese goods were expected to jump from 10% to 25%. The two sides met in Argentina, where the G20 summit took place.
The U.S. said that China has also agreed to buy “very substantial” amounts of U.S. commodities, including ag products. But China did not make mention of this, and in fact there is no joint formal agreement between the two countries. China’s retaliatory tariffs on soybeans, cotton, pork and a range of other products appear to remain in place.
U.S. officials including President Trump have also said that China has agreed to eliminate its current tariff on U.S. automobiles, which is currently at 40%, but China has not confirmed that.
Soybean futures surged initially by 30 cents on Sunday’s open, but steadily retreated throughout Monday and ended at session lows, about 20 cents off the day’s highs.