World Grain - July 2020 - 6

FROM THE EDITOR

Confusion reigns in
China-US trade deal

R

elationships between capitalist and communist governments
are rarely cordial, even in times
of global peace and prosperity. But the
coronavirus pandemic that originated in
China before spreading worldwide, leading to unthinkable loss of life and economic damage, has caused the already
volatile relationship between the United
States and China to descend into an even
greater level of contempt and mistrust.
Thus, the fate of phase one of the countries' trade deal struck last January, which
includes a promise by China to purchase
billions of dollars of US soybeans and
other grain products, remains uncertain.
In a dizzying frenzy of contradictory messaging and actions, China announced a
halt to US soybeans purchases on June
1, then preceded to ramp up purchases
from the United States over the next several weeks. In late June, US trade advisor
Peter Navarro told a news outlet that the
China-US trade deal was "over," only to
hours later say his comments were taken
"wildly out of context," while US PresiGHQW'RQDOG7UXPSFRQ¿UPHGLQDWZHHW
the deal with China was "fully intact."
How did we get to this confusing
point? At roughly the same time the
deal was reached in January, reports of a
novel coronavirus outbreak originating
in Wuhan, China, began capturing the
world's attention. Just a few weeks later,
it evolved into a global pandemic that is
still ongoing, having infected millions
while killing hundreds of thousands. No
country has been harder hit than the US,
which has by far the highest number of
COVID-19 cases and deaths. It also has
crippled the once-soaring US economy,
causing double-digit unemployment
and leading analysts to forecast a cataclysmic 40% second-quarter decline
in GDP.
As details about the origins of the viUXV HPHUJHG 86 R൶FLDOV DFFXVHG WKH
Chinese government of failing to contain
6

COVID-19 by allowing Chinese citizens
WR À\ LQWHUQDWLRQDOO\ IRU VHYHUDO ZHHNV
after it knew the virus was transmitted
between humans. Trump even brazenly
GXEEHG LW WKH ³&KLQHVH 9LUXV´ LQÀDPing an already tense situation. With all
this acrimony, it's not surprising that
China, like it did the previous two years
of the trade war, is looking to Brazil as
its primary soybean supplier in 2020. Although China will still need millions of
tonnes of US soybeans to meet demand,
the amount will likely fall short of the
huge quantities it bought in pre-trade war
years and promised to buy this year.
Easing of diplomatic tensions in the
short term appears doubtful. China is
likely waiting to see what happens in the
Nov. 3 US presidential election. If Democratic challenger Joe Biden, who currently leads in the polls, defeats Trump,
tensions between Washington and Beijing could ease a bit, perhaps opening the
door for increased trade.
It's important to note that the US isn't
the only country at odds with China. In
May, Australian Prime Minister Scott
Morrison called for an investigation into
the origins of the COVID-19 pandemic.
China angrily responded by banning
Australian meat imports and slapping
D WDUL൵ RQ LQFRPLQJ EDUOH\ VKLSPHQWV
H൵HFWLYHO\ FXWWLQJ R൵ LPSRUWV IURP LWV
largest barley supplier. With its 1.4 billion mouths to feed, how long can China
D൵RUG WR HQJDJH LQ D
feud with its most dependable soybean and
barley suppliers? The
answer may depend on
who wins the US presidential election and
how deeply governments such as Australia are willing to dig for answers regarding the origins of COVID-19.
Arvin Donley
Editor

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___________________________
Morton I. Sosland 1925-2019
WORLD GRAIN (ISSN 0745-8991) Volume 38, issue 7,

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July 2020 / World Grain / www.World-Grain.com


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World Grain - July 2020

Table of Contents for the Digital Edition of World Grain - July 2020

World Grain - July 2020 - 1
World Grain - July 2020 - 1
World Grain - July 2020 - 2
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