China resumes United States soybean imports, may cut auto tariffs

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Cargill Inc. said earlier this month that the USA has probably already missed the best chance to sell beans to China because of approaching South American harvests.

"China has revealed two cards by lowering import tariffs on cars and buying American soy beans, but [US president Donald] Trump has yet to do so", she said.

President Donald Trump agreed on December 1 to postpone more USA tariff hikes on Chinese goods for 90 days while the two sides negotiate over American complaints about Beijing technology policy. U.S. Trade Representative Robert Lighthizer has been tasked with negotiating a deal focused on technology issues by March 1.

President Trump, in an interview with Reuters, stated that he would be willing to intervene in this case if it benefited usa national security and also helped with the easing trade tensions with China.

The US has a long list of complaints against China on intellectual property, forced technology transfers and industrial subsidies.

Although market watchers here have not noticed any big purchase of USA soybeans by Chinese importers, the optimistic atmosphere did boost the oil seed futures.

A proposal has been made to China's cabinet to eliminate the 25 per cent surcharge the country slapped onto USA -made vehicles earlier this year.

In followed-up talks by phone on Monday, Beijing pledged to lower punitive tariffs on U.S. auto imports, resume purchases of American soybeans, and reform its 10-year economic program to allow more United States investment, according to reports.

Benchmark soybean futures on the Chicago Board of Trade on Wednesday hit their highest level since midsummer.

Chinese state-run firms Sinograin and Cofco bought the soybeans, said one European trader.

The sellers included global agricultural merchants Cargill Inc, Louis Dreyfus Co and USA farmer-owned agriculture firm CHS Inc.

They are the largest exporters of China-bound sport utility vehicles from the US and significant importers of luxury sedans into the USA, said Jeff Schuster, the president of global forecasting for LMC Automotive. "However this approach is making China think twice about their hard stance", said Ernesto Ramos, Managing Director of Active equities for BMO Global Asset Management in Chicago.

US stocks were up one per cent on Wednesday (Dec 12), though well below their session highs, as investors were hopeful about US-China trade relations after the latest comments from both sides and eyed some reassuring signs in British politics.

The soybeans are expected to be shipped from grain terminals in the U.S. Pacific Northwest, the most direct route to Asia, the traders said.

"Taking the tariff back down from 40 percent to 15 percent should normalize sales up and secure jobs in the U.S.", Jefferies analyst Philippe Houchois told CNBC.

"This is a start", said Valley City, North Dakota farmer Monte Peterson. United States business executives are now bracing for further retaliation from China due to Meng's arrest.

The truce, reached after a dinner of more than two hours Saturday, buys time for the two countries to work out their differences in a dispute over Beijing's aggressive drive to supplant USA technological dominance.