China has ordered two major state-run agricultural businesses to suspend purchases of US farm goods, according to a report. The move will almost certainly impact China’s pledge as part of the US-China phase one trade deal to purchase $250 billion in US goods annually.
Cofco and Sinograin, two state-owned traders, were ordered by Chinese Communist Party officials to cease the purchasing of US farm goods including soybeans and pork, Bloomberg reported Monday.
President Trump signed phase one of the deal with China in January, ending a bitter trade war between the two countries that took place amid months of tense negotiations.
Since then, relations have soured as the Communist nation has faced a wave of international scrutiny for its lack of transparency at the onset of the coronavirus outbreak.
President Trump and top administration officials — most notably Vice President Mike Pence and Secretary of State Mike Pompeo — have squarely blamed China for the global health emergency. Beijing, meanwhile, has been engaged in a months-long smear campaign against the three men.
In early May, Trump told The Post in an Oval Office interview that Chinese authorities were responsible for the virus’ spread.
“I think the worst part of it was they could have extinguished the fire. And they could have stopped people from traveling and extinguished the fire. And they did stop people from traveling to China, but not to other parts of the world. So it’s a very sad event, I will tell you,” he remarked.
The commander-in-chief asserted during a Fox News town hall last month that if China did not uphold its end of the bargain, there would be consequences.
Responding to a question from a business owner who said he was losing money on tariffs placed on China, Trump said the duties in the trade agreement required China to make those $250 billion in purchases.
“Now they have to buy, and if they don’t buy, we’ll terminate the deal. Very simple,” he assured the man.
Asked by a reporter in the Oval Office one week later whether he was pleased with how China was fulfilling the trade deal, the president said he would have an answer “in a week or two,” but added that it was something the White House was “watching closely.”
“They’re buying a lot of farm product, but are they buying to the level that they were supposed to? You know, they were going to buy $50 billion worth [of US farm goods], the most they ever did was $15 or 16 [billion]. And now they’re going to … anywhere between $40 to 50 [billion] in terms of farm [goods], but $250 billion overall,” he added.
In the weeks since making those comments, Trump administration officials have been in debate over whether to stick with the deal if China is unable to meet its purchasing requirements, according to Reuters.
Officials close to Trump have said that both he and the administration have little hope that China will be able to maintain its end of the deal, the outlet reported.
Still, walking away from the deal could cause further economic harm, a risk the commander-in-chief is aware of.
Canceling the agreement could risk an increase in unemployment at a time when US job losses are already at an all-time high, reigniting a fraught trade dispute as the global economy struggles to bounce back.
Despite doubts, Chinese Vice Premier Liu He maintained China’s pledge last month that it would implement the agreement.
White House Economic Adviser Larry Kudlow was not as enthusiastic during a CNBC appearance last week on the deal, calling the relationship between the two countries “complex” and saying that the agreement “does continue to go on for the moment.”
Adding further tensions to the two countries’ relationship is the Communist country’s handling of Hong Kong.
Pro-democracy protests took over the city for nearly all of last year and left the region in a tense power struggle with the Chinese Communist Party.
The mobilization was sparked by the CCP introducing a plan that would allow for the extradition of criminal suspects from Hong Kong to mainland China.
The bill was withdrawn last September but the rallies continued to support full democratic reforms and investigations into the police’s actions.
Demonstrations were slowed down by the coronavirus pandemic, which forced the movement indoors. Since then, with more in the country going outside again, the protests have started up again, leading to numerous high-profile arrests.
Renewed protests have also been motivated by Beijing’s push to impose a new “national security law” on Hong Kong, which White House National Security Adviser Robert O’Brien has threatened to sanction the country over.
The law would restrict Hong Kong’s autonomy, which was established when the former British colony was returned to China in 1997.
In response to US criticism of the Hong Kong measure, Chinese foreign ministry spokesman Zhao Lijian slammed American leadership on Monday, saying their allegations against the Chinese Communist Party “show a total disregard of facts.”
“Any words or actions by the US that hurt China’s interests will be met with firm counterattacks,” Zhao continued.
A spokesperson for the office of the US trade representative did not immediately respond to The Post’s request for comment.
With Post wires