Trump says China will buy $50 billion of US farm goods. But one chart shows they've never come anywhere close to that before.
Reuters
The United States and China on Friday announced a "Phase One" deal that would prevent an immediate escalation of the trade war between the two largest global economies.
Speaking to reporters at the White House, President Trump said the Chinese had agreed to buy $50 billion of American agricultural goods as part of the trade agreement.
But there's one big reason to be skeptical of that figure: China has never come anywhere close to buying US farm goods at that amount.
That would be double the historic rate of the China's purchases of US farm goods, given that China at its peak only bought $25.9 billion of American agricultural products in 2012, according to Labor Department data illustrated in the graph below.
The United States and China announced a "Phase One" deal that would prevent an immediate escalation of the trade war between the two largest global economies on Friday.
It would, for the time being, cancel the $160 billion in tariffs that President Trump was slated to kick in on Dec. 15 that would have taxed virtually every remaining good China sold to the United States. He also agreed to cut in half tariffs on more than $100 billion a year of products like lawn mowers and clothing.
The final terms governing commerce between Washington and Beijing are still being hammered out, but Trump is expected to roll back over time the $360 billion in tariffs on Chinese goods already in place.
Speaking to reporters at the White House, Trump said the Chinese had agreed to buy $50 billion of American agricultural goods as part of the trade agreement. The Chinese government hasn't confirmed it though and avoided giving firm figures in its own announcement.
"I think they'll hit $50 billion," Trump said. "They've already stepped it up."
But there's one big reason to be skeptical of that figure: China has never come anywhere close to buying US farm goods at that amount.
It would be double the historic rate of the China's purchases of US farm goods, given that China at its peak only bought $25.9 billion of American agricultural products in 2012, according to Labor Department data illustrated in the graph below.
Andy Kiersz/Business Insider
In 2018 — when Trump started the trade war — farm exports to China were cut in half from the year before to only $9.2 billion. Analysts projected that it would slump a bit further to $8 billion this year.
The increased rate of purchases could provide relief to farmers who have suffered billions in Chinese sales. But there are still many hurdles as they try reestablish their trade relationship with China, according to Matt McAlvanah, the spokesperson for Farmers for Free Trade, an advocacy group.
McAlvanah previously told Business Insider that "it's very difficult to regain markets farmers have spent decades cultivating. These relationships are built over time, they're built on trust — and when they go away overnight, they don't come back overnight."
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