China orders firms to stop buying U.S. farm goods
China is striking back at the U.S. over Washington's punitive actions on Hong Kong. Sources tell Reuters Beijing has ordered state-owned firms to stop buying soybeans and pork from the U.S. Also put on hold: large volume purchases of U.S. corn and cotton. The sources said Beijing is ready to expand that list if Washington takes more action on Hong Kong.
And under a worst case scenario, a source said Beijing will scrap the Phase 1 trade deal. Under that agreement signed in January, China had pledged to buy an additional $32 billion of U.S. agricultural products over two years. In the first quarter, China bought more than $1 billion worth of U.S. soybeans and nearly $700 million of pork.
But tensions between the world's two largest trading partners have been escalating for months, with U.S. President Donald Trump accusing China of mismanaging the pandemic and threatening to hold Beijing to account. Then on Friday, Trump vowed to end the U.S.' preferential treatment for Hong Kong. That was in response to China's plans to impose a new national security law over the former British colony.
The source said Chinese importers canceled up to 20,000 tons of American pork shipments after Trump's announcement Friday. That's equivalent to one week's worth of orders.
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