White House reviewing ‘phase one’ agreement with China
China bought a mammoth 5.85 million tonnes of American-grown corn last week, including 2.108 million tonnes on the same day that the White House said the “phase one agreement” that de-escalated the trade war was under review. “The national security team, the newly confirmed secretary of state, and President Biden are all reviewing all aspects of our national security approach, including certainly our relationship with China,” said press secretary?Jen Psaki.
“We are focused on approaching that relationship from a position of strength, and that means coordinating and communicating with our allies and partners about how we’re going to work with China,” Psaki said on Friday, in response to a question about whether the agreement was still in effect. “Everything that the past administration has put in place is under review, as it relates to our national security approach.”
The phase-one agreement, signed by then?President Trump in mid-January 2020, called on China to buy large amounts of U.S. products and services. Beijing fell far short of the targets in 2020. According to data compiled by the?Peterson Institute for International Economics, China imported $100 billion of the overall goal of $173.1 billion of goods and services. In the food, agriculture, and seafood sector, imports totaled $23.5 billion, well shy of the goal of $36.6 billion. The goal for food, agriculture, and seafood is $43.5 billion this year.
From Tuesday through Friday, private exporters reported to USDA corn sales to China totaling 5.85 million tonnes. The sale reported on Friday, of 2.108 million tonnes, was the second-largest sale on record for U.S. corn. The 1.7 million tonnes reported on Wednesday was the seventh?largest.
Since the marketing year opened last Sept. 1, China has purchased 17.7 million tonnes of U.S. corn. Some 5.94 million tonnes of it were shipped as of Jan. 21. The rest remains on the books.
“China’s big corn purchase announcements come in the same week it escalates things with Taiwan by flying fighter jets and bombers through its airspace, stating ‘Taiwan independence means war.’?Both events come in the first week of a new president in the White House,” said?Arlan Suderman, chief commodities economist for StoneX Group, on social media.