USDA waiting to hear from China if coronavirus will reduce U.S. farm purchases

(Reuters) – China has not informed the United States of any delays or reductions of its planned purchases of U.S. agricultural goods under the Phase 1 trade deal due to the outbreak of coronavirus, U.S. Department of Agriculture Under Secretary of Trade Ted McKinney said on Wednesday.

“We have not received any formal notification of a delay, which pleases me. We hope it doesn’t come,” he said on the sidelines of an ethanol conference in Houston.

White House national security adviser Robert O’Brien said on the coronavirus outbreak could reduce Chinese purchases of U.S. agricultural products this year.

The fast-spreading virus has killed more than 1,100 people in China, where there have been over 44,000 cases. There have been hundreds of confirmed cases in dozens of other countries, including 13 in the United States.

The Phase 1 trade agreement, which was signed on Jan. 15, calls on China to boost its purchases of U.S. agricultural commodities by $40 billion over the next two years.

McKinney said that if the outbreak lasts for a long time – impacting shipping and other economic activity – it would raise the chances of China cutting planned purchases.

“I suspect it’ll be determined by how long the issue goes on,” he said.

He said he hoped China would consider additional tariff relief to help it meet its purchase commitments, but had no indication Beijing would do so.

“They made the commitment and it will be difficult to meet that commitment with the current tariff schedule and conditions in place,” he said.

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