Chinese officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start buying some U.S. products "immediately."
Chinese officials have been told to take necessary steps for the purchases, according to two officials with knowledge of the discussions. It wasn't clear whether the preparations meant China would cut the retaliatory tariffs it imposed on those products, or when the purchases would happen. It is possible that Beijing could reimburse buyers for the tariffs they pay, as they have done for purchases for the state soybean reserve.
Chinese purchases of the goods collapsed after Beijing imposed tariffs on them in retaliation for U.S. import taxes.
Chinese imports of American soybeans fell 95 percent in October compared with last year. Even if the tariffs are lifted now, the U.S. crop is becoming less competitive in the Chinese market as the harvest season approaches in South America. The U.S. probably already has missed its best chance to sell soybeans to China, according to Cargill Inc., one of the world's biggest agriculture commodity traders.
China is the world's top soybean consumer, and the U.S. and Brazil are the top producers.
U.S. liquefied natural gas also was absent from China's shopping list in October, after Beijing's move in September to impose a retaliatory 10 percent tariff on U.S. supplies. Even so, Asia's biggest gas consumer imported at least one U.S. cargo in November, according to vessel-tracking data compiled by Bloomberg, and there's another en route. Heading into winter, Australia, Turkmenistan and Qatar were China's top gas suppliers, according to customs.
Trump says he wants to shrink a gaping $336 billion U.S. trade deficit with Beijing -- the gap between how much America buys from China and how much it sells -- and stop the Chinese from stealing or forcing the hand-over of U.S. technology and intellectual property.
Trump on Wednesday tried to calm global markets and ease concerns that his trade truce with China was already foundering, declaring in a series of tweets that the Chinese government has sent "very strong signals" since Trump reached an accord with Chinese President Xi Jinping in Argentina last weekend.
Trump imposed tariffs of 10 percent on $200 billion worth of Chinese goods in September. Those tariffs were set to rise to 25 percent on Jan. 1. The president also had threatened to impose tariffs on essentially all the remaining goods from China that aren't already subject to his higher tariffs. The Trump-Xi dinner negotiations in Buenos Aires, though, led the two sides to hit pause and agree to 90 days of negotiations.
Confusion about what Trump and Xi actually agreed to at their meeting, combined with Trump's declaration Tuesday that he was a "Tariff Man," roiled global markets, ending a brief rally that began Monday after the two governments announced the truce.
While U.S. markets were closed Wednesday to honor the late President George H.W. Bush, Trump used the opportunity put a more positive spin on his negotiations with the Chinese.
"Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting," Trump wrote in a post on Twitter.
The few words offered Wednesday by China's Commerce Ministry expressed confidence but provided little clarity on just what agreements the two leaders reached.
"It was a very successful meeting, and we are very confident in the implementation," a Commerce Ministry spokesman said in comments posted on the agency's website. But the comments offered few hints on what was agreed upon or what would be implemented.
Global markets did not express the same optimism, selling off in both Europe and Asia.
The Dow Jones industrial average plunged 800 points Tuesday over confusion about what the U.S and China will do going forward, and investors are looking for hints as to what to expect today when markets open again.
Trump and White House aides have promoted the apparent U.S.-China agreement in Buenos Aires as an historic breakthrough that would ease trade tensions and potentially reduce tariffs. They announced that China had agreed to buy many more American products and to negotiate over the administration's assertions that Beijing steals American technology. But Tuesday morning, Trump renewed his tariff threats in a series of tweets.
White House aides have struggled to explain the details of what the two countries actually agreed on. And China has not confirmed that it made most of the concessions that the Trump administration has claimed.
In addition, Treasury Secretary Steve Mnuchin said Tuesday on the Fox Business Network that China agreed to buy $1.2 trillion of U.S. products. But Mnuchin added, "if that's real" -- thereby raising some doubt -- it would close the U.S. trade deficit with China, and "we have to have a negotiated agreement and have this on paper."
"The sense is that there's less and less agreement between the two sides about what actually took place," said Willie Delwiche, an investment strategist at Baird. "There was a rally in the expectation that something had happened. The problem is that something turned out to be nothing."
Other concerns contributed to the stock sell-off, including falling long-term bond yields. Those lower rates suggested that investors expect the U.S. economy to slow, along with global growth, and possibly fall into recession in the coming year or two.
Information for this article was contributed by Anna Kitanaka, Ramsey Al-Rikabi and Jeremy Hill of Bloomberg News; by Christopher Rugaber, Blake Nicholson and Josh Boak of The Associated Press; and by Robyn Dixon of the Los Angeles Times.
A Section on 12/06/2018