Even though China signed Phase 1 of the trade deal between them and the United States, there is skepticism about China's ability to buy as much as $50 billion in U.S. goods. And while China promises to stick their vows of buying $200 billion U.S. goods in 2020-21, many expect for a part of those purchases to be bought in the later half of the year. Not surprising that China is expecting that the U.S. will agree to some flexibility on their promises in the face of the spreading coronavirus that threatens to slow down domestic growth.
The virus and loss of domestic growth will delay any purchases that could've boosted the U.S. agriculture sector from the decline of Chinese demand for U.S. agriculture in recent years.
But until actual purchases begin, there will not be enough confidence in the marketplace to see any significant value improvement. The delay in purchases may even affect the next elections due to the agriculture sector being a huge voting bloc for the current administration. It is probably unlikely that the delay would change voting decisions much, but it is a small possibility that it may occur.
https://www.bloomberg.com/news/articles/2020-02-03/it-ll-be-a-while-before-china-spends-billions-on-u-s-farm-goods
2 comments:
I think since the election is not until November, and they are waiting until the second half of the year then I don't see it having much if any affect on the election.
I believe that this administration has made clear that they plan to be unwavering in their economic battle with China. While it does seem quite bleak, this corona virus problem does not help China in gaining a better hand to bargain with, and I do not see any changes coming in trade relations as we wait for the true affect of the virus in China to be known.
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