The escalating trade conflict between Beijing and Washington has caused commodities to lose a lot on both sides. However, since the tensions have now calmed down, these goods are set to benefit again. This is after China’s pledge to import more American goods to balance the enormous trade deficits with the United States. The President of the United States, Donald Trump, issued threats that he would impose $150 billion in tariffs on Chinese imports into the United States. President Trump said that the tariffs would concentrate more on aluminum and steel products. This move was meant to serve as a punishment to China for allegedly violating US intellectual property and engaging in unfair trade practices.
On the other hand, the Chinese vowed that they would retaliate by imposing tariffs on American imports into Asia including wine, fruit and soybeans. However, the two countries reached an agreement to do away with the planned tariffs. This is after deliberations by the representatives from both the US and China that happened in Washington last week. In a joint statement that was released by Washington, the Chinese government agreed to increase energy and agricultural imports from the United States. The joint statement also had details and schedules that the two economic superpowers decided to work at a later date. The focus now has been switched on the American goods that China is set to buy more.
This oilseed has become one of the crucial battlegrounds for the US-China commerce war. Political analysts say the Chinese government’s planned tariffs are a strike on the agricultural areas where President Trump got the most support. The United States is the largest exporter of soybeans while China has the highest demand for the oilseed. Last year alone, the commodity resulted in a $14 billion bilateral trade between the two countries. Since President Trump took office, China is buying more soybeans from Brazil than from the United States.
Cotton represents another significant commerce flow from the United States. In the last financial year, cotton fetched over $5.8 billion in revenue for the United States. China ranked as the second highest importer of American cotton after Vietnam. The severe weather in the cotton-producing parts of China such as Xinjiang has resulted in high demand for cotton. In the last financial year, Beijing’s annual import of cotton was 894,000 tons. If the US can capitalize on this market, it is likely to fetch a good revenue.