Published: Fri, December 14, 2018
Money | By Bruce West

China makes big U.S. soybean purchase

China makes big U.S. soybean purchase

Brent futures added another 65 cents to $60.85, while USA crude rose 60 cents to $52.25 a barrel.

The tariff reduction benefits Daimler and BMW more than USA automakers such as General Motors or Ford Motor Co.

On Tuesday, Asian equities struggled again despite a bounce in NY as investors fret over a flawless storm of issues, including fears that the arrest of Meng Wanzhou, Huawei's chief financial officer, in Canada could further inflame the China-US trade row. The U.S.is now imposing a 10 percent duty on imported aluminum and a 25 percent duty on imported steel. The company has been working with Shanghai's government on establishing a factory to assemble cars in China.

The U.S. Department of Agriculture in July had authorized up to $12 billion in aid for farmers and ranchers hit by the fall-out from Trump's escalating trade war with China, a major buyer of American agricultural products, and the agency outlined payments for the first half last August.

The purchase of over 1.5 million tonnes of beans is the most concrete evidence yet that China is making good on pledges the US government said Xi made when the two leaders met on December 1 and agreed to a 90-day detente to negotiate a trade deal.

The U.S. and China also made progress on the regulation of fentanyl, which is 50 times more powerful than heroin.

"These are policies and concerns that don't have a lot of informational arbitrage - it is hard to know exactly where the U.S".

In retaliation, China raised the duty on U.S. auto imports to 40%, though it proceeded with the lower rate on imports from other countries. Following a summit on trade in Buenos Aires earlier this month, Mr Trump jolted global vehicle stocks with a tweet that China agreed to "reduce and remove" tariffs on imported American-made cars, something China did not confirm at the time.

The two sides are expected to negotiate over USA demands for stronger Chinese protections for US intellectual property, an end to forced technology transfers and greater market access to China for USA companies.

"I just heard today that they're buying tremendous amounts of soybeans".

China has agreed to cut tariffs on autos imported from the United States, and resume soybean purchases, Commerce Secretary Wilbur Ross said Wednesday, confirming the reports that delighted investors.

President Donald Trump first tweeted that China was prepared to make the move the day after his dinner with his Chinese counterpart, Xi Jinping.

Even if talks can stop the trade war, at least for now, farmers are trying to diversify away from China, according to a Wall Street Journal report. Both Chinese and American trade officials say that there is indeed dialog between the two nations to reach a compromise. In its latest guidance reported by state media on Wednesday, references to "Made in China 2025" were omitted.

The development bodes well for Ford Motor Company and BMW, which export luxury vehicles made from the United States to China.

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