The White House announced Saturday night that China has agreed to “start purchasing agricultural products from our farmers immediately” after a dinner meeting between President Donald Trump, Chinese President Xi Jinping and high-level officials on both sides.

It’s unclear whether China agreed to lift its wide-ranging retaliatory tariffs on everything from soybeans to tree nuts that have been responsible for the massive reduction in U.S. ag exports, but the meeting  following a dinner of grilled sirloin, seasonal vegetable salad and caramel rolled pancakes on the sidelines of a G20 summit in Buenos Aires, Argentina – appears to have reduced trade tensions between the world’s two largest economies.

Trump agreed during the talks to hold off on a planned increase in the rate on tariffs he imposed on China. In return, the White House said, China agreed to “immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.”

That promise by Xi was key. National Economic Council Director Larry Kudlow stressed to reporters Tuesday there would be no chance of a deal with China if the country refused to stop trying to appropriate U.S. intellectual property.

Trump told reporters aboard Air Force One on the way back to Washington that the Chinese pledge would have an "incredibly positive impact" on U.S. agriculture and other sectors. 

"China will be opening up.  China will be getting rid of tariffs.  You know, China right now has major trade barriers -- they’re major tariffs -- and also major non-tariff barriers, which are brutal.  China will be getting rid of many of them.  And China will be buying massive amounts of product from us, including agricultural from our farmers -- tremendous amount of agricultural and other products," the president said. 

The U.S. was scheduled to raise the tariff rate on $200 billion worth of Chinese goods from 10 percent to 25 percent. That won’t happen now for at least another 90 days as the countries continue to negotiate.

“This was an amazing and productive meeting with unlimited possibilities for both the United States and China. It is my great honor to be working with President Xi,” Trump said in a statement.

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The U.S. first hit China months ago with tariffs on steel and aluminum, which resulted in Chinese retaliatory tariffs on pork, dairy, and other commodities. The U.S. then levied $50 billion in import taxes on China to punish it for intellectual property theft and policies of forced technology transfer. China responded in kind, including a 25 percent tariff on U.S. soybeans, wheat, sorghum and corn.

The next escalation was a new round of U.S. tariffs on $200 billion worth of Chinese goods. It’s those duties that were scheduled for a rate hike. That could still happen, the White House warned; the rates will go up in 90 days if no final deal is reached.

The impact of the trade war in the U.S. has been felt most heavily by the U.S. ag sector, prompting the Trump administration in August to begin spending billions of dollars to shield farmers and ranchers from some of the pain.

Primarily blaming Chinese tariffs, the USDA’s Economic Research Service slashed the fiscal year 2019 forecast for U.S. agriculture exports by $3 billion.    

“Soybean export volumes are down because of declining Chinese purchases from the United States as a result of trade tensions, and as a record U.S. crop continues to pressure soybean prices lower,” the ERS said in the report.

U.S. soybean exports are now forecast at $18.7 billion in FY 2019, down from the August prediction of $21 billion. The U.S. exported $21.6 billion worth of soybeans to China in FY18.

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