On Tuesday, China purchased 1.76 million tons of American corn, marking the largest ever buy of US corn. It is also the biggest sale of US corn to a single customer in the past thirty years, following the last mega sale in 1991 to Russia.
This was also the second major corn purchase by Chinese importers within four days. The latest purchase was valued at $232 million, based on futures prices on the Chicago grain market. In addition, exporters also reported the sale of 129,000 tons of soybeans worth $42 million to China.
Both transactions require delivery within the sales season beginning on September 1. Previously, Chinese buyers were the largest consumers of US agricultural exports, though they typically purchase in late summer or autumn because US prices are usually lowest at harvest time.
On Friday, exporters announced sales of 1.365 million tons of corn worth $180 million and 320,000 tons of US wheat worth $63 million for delivery to China. The Chinese purchases coincide with President Trump's announcement that Americans are better off forgetting about “phase two” of a China-US trade deal. Earlier this year, Trump had finalized an agreement that included Chinese purchases.
In the “phase one” agreement that eased the trade war between China and the US, China committed to buying $36.6 billion worth of American food, agricultural, and seafood products this year. According to the Peterson Institute for International Economics, China has imported only $7.5 billion (less than five percent) of those products in the first five months of the year, based on Chinese data. Critics accuse Trump of being duped by Beijing, with none of China’s promises materializing.
On Tuesday, Trump closed the door on “phase 2” trade negotiations with China, saying he no longer wants to talk with Beijing about trade due to the coronavirus pandemic. “I’m not interested in talking to China at this time,” Trump replied when asked in a CBS News interview whether phase 2 trade talks were dead. The announcement that he no longer wants to do business with China because of corona was also the first time Trump wore a face mask in a TV interview.
For months, Trump blamed China for sending the coronavirus to the United States and said China “must be held accountable” for failing to contain the disease. The pandemic has taken a heavy toll on the US economy, threatening Trump’s hopes for reelection in November. China had pledged to increase imports from the US by $2 billion in phase 1, but Trump has stated that the pandemic has changed his view of the deal.