Not This Again. China Announces Waivers For Soybeans And Pork 

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Not This Again. China Announces Waivers For Soybeans And Pork 

China has been telling the US for the last four months it will waive tariffs on agriculture products.

Though the latest USDA data shows soybean exports to China are underwhelming. In early Sept., China said it would waive soybean tariffs and start buying. Then in late Oct., China repeated it. Now a new headline from China states that it has waived duties of soybeans and pork, but does that mean China is actually going to start buying, or is it a feel-good narrative for President Trump to pump on Twitter?

Not This Again. China Announces Waivers For Soybeans And Pork 

China has made President Trump look like a fool in the last four months. Trump, not China, is desperate for a trade deal to please US Central and US Midwest farmers (all about wins for the upcoming election year), announced a fake trade deal in early Oct. on Twitter. 

Even CNBC this week called him out on the phony trade deal. He told farmers in several tweets that they better start buying bigger tractor because China is making substantial agriculture purchases. 

But none of that came true. The sad reality is how gullible Trump is (and maybe how desperate he is), and how every time China waived tariffs, Trump went on Twitter announcing huge agriculture deals. Though none of it was true, and what China did, was while they talked a good game, sourced soybeans and meat from Argentina and Brazil. 

Readers have understood this through our South American coverage that China signed trade deals with both of these countries in the last four months. In one instance, China announced that they would open a ‘grains superhighway‘ in Argentina to source soybeans.

So it should now make sense why Trump wants to unleash a tariff war on Argentina and Brazil, mostly because China sourced their latest agriculture products from both of those countries and abandoned US farmers. 

Why would China want to buy and entirely rely on the US for agriculture products? It doesn’t make sense if you think about it like this — in the view of the Chinese: Trump can wake up any day, and for whatever reason, halt bulk carrier shipments of products en route to the East, as he could say it’s a “national security threat.” 

Since we’ve heard the waiver story before, here’s China’s Tariff Commission of the State Council announcing Friday morning waivers “to exclude some soybeans, pork, and other goods purchased from the United States.” 

“According to domestic needs, Chinese enterprises independently import certain quantities of goods from the United States through market-based procurement. The Customs Tariff Commission of the State Council is carrying out the exclusion of some soybeans, pork and other commodities based on the application of relevant enterprises. For the products within the exclusion range, the exclusion measures such as the 301 measures against the United States against tariffs are adopted. For the procurement of goods within the exclusion range, the enterprise shall negotiate independently, import on its own, and bear its own profits and losses.”

And here’s the truth, as of Friday morning (5:15 am est.), the world’s bulk carriers hauling grains, meals, feeds, and softs, are primarily flowing from Argentina and Brazil to Europe and South East Asia, with basically no ships flowing from the US to China. 

Not This Again. China Announces Waivers For Soybeans And Pork 

So the question everyone is asking: Is China actually going to buy $40 billion to $50 billion in US farm products per year? 

The answer is likely no. It was an overstated number by Trump to pump stocks. There was even a report on Thur. detailing how there’s disagreement on the size of agriculture purchases. 

Now the time has come where Trump must show everyone this wonderful trade deal announced in Oct. Though he’s having trouble because there was never a deal.

Of course, the market doesn’t care whether it’s true or not, it’s a dip-buyiong opportunity (sending stocks higher and Treasury prices lower overnight)…

Not This Again. China Announces Waivers For Soybeans And Pork 


Tyler Durden

Fri, 12/06/2019 – 06:06

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