China's Tariff Cuts Fail to Boost Demand for US Grains Amid Economic Slowdown
China's decision to cut tariffs on US agricultural products has left crop traders uncertain about whether it will boost demand for major grains. The reductions, announced a day after a summit between the leaders of the two nations, do not include soybeans, which were excluded from the cuts.
Say analysts, sluggish economic growth in China has sapped demand for corn and wheat imports, keeping prices subdued. Soybean futures fell in Chicago after dropping more than 2% on Monday, while wheat and corn also declined further after their previous session's drop.
Liu Haowen, an analyst at Wuchan Zhongda Futures Co., said China's decision to maintain the 10% tariff on US soybeans reflects its desire for flexibility in managing imported soybean supplies. The country is set to reduce duties on US wheat, corn, and sorghum as part of a plan to lower tariffs on about $30 billion of imports from each side.
The American Soybean Association expressed disappointment that US beans were not included among the tariff cuts, urging trade negotiators to pursue a deal providing additional support for American supplies. China had committed to buying at least 25 million tonnes of US soybeans annually through 2028 and $17 billion in American agricultural products.