Penn: China Trade Spat ‘Short Term’
Trade tensions between the United States and China caused by the announcement of new U.S. quotas on Chinese textile shipments are likely a "short-term" problem as China still needs U.S. soybeans and cotton, USDA Undersecretary J.B. Penn said Monday.
In a USDA teleconference, Penn told reporters, “We expect that – of course the Chinese were displeased with our actions, but we think that these are the rules of the trade agreements and everybody should live by those, and we certainly want to enforce the trade agreements, just as other people do with us. But we do think that the Chinese need soybeans and cotton, and we think that they will be purchasing those commodities.”
He added, "We think that these are short-term difficulties in our trading relationship. But we think that the Chinese are still going to be a big customer, especially for these products."
Shortly after U.S. officials announced last week that they would set a quota on imports of Chinese-made brassieres, dressing gowns and knit fabrics last week, China canceled buying missions for U.S. agricultural products that had been scheduled to visit the United States ahead of the visit of China’s Premier on Dec. 8-9. The trade delegations had been expected to buy U.S. soybeans, cotton and possibly wheat.
The trade tensions between the U.S. and China appeared to escalate Monday when the U.S. Commerce Department issued a preliminary ruling that Chinese manufacturers were dumping colored TV sets on the U.S. market and set duties of 28% to 46%.
China said it was "gravely concerned" over the TV decision, but stopped short of saying if it would hit back.
Shortly after the textile decision, Beijing announced it would raise duties on some U.S. goods, but said that was in response to U.S. tariffs on steel imposed a year and a half ago. Those tariffs were ruled illegal by the World Trade Organization earlier this month.
Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.