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Friday, December 13, 2019

The 15 Dec tariffs between the US & China are halted.

https://sg.finance.yahoo.com/news/trump-approves-us-china-trade-deal-to-halt-dec-15-tariffs-034516939.html

It is a piece of good news to halt the 15 Dec tariffs so that we all can enjoy our festive seasons like X'mas and New Year.

However, I'm not optimistic about the signing of the agreement because the US is forcing China to buy US$50B worth of farm products especially the soybeans.  This US$50B is double what China bought in the previous year and far exceeded China's demands.  China had already signed soybean purchase orders from Brazil, Argentina, Russia and also started to plant its own hybrid soybeans.

http://sg-stock.blogspot.com/2019/10/trump-has-fallen-into-chinas-gambit.html

http://sg-stock.blogspot.com/2019/08/trump-is-in-trouble-because-china-is-no.html

Therefore, it will be impossible for China to purchase US$50B of farm products since there is no such demand and soybeans are perishable goods.  China also won't put its food supplies in the hands of the US because food is a strategic supply.  The bottom line is China doesn't want its people to go hungry during any US-China confrontation.

2 comments:

Eric Ho said...

https://www.channelnewsasia.com/news/business/us-deal-in-principle-china-trade-war-12180440

Eric Ho said...

https://finance.yahoo.com/news/china-wont-hike-grain-import-040524883.html

This article corroborates our analysis that it is impossible for China to import US$50B of US agricultural products.