China has ordered several state-owned agricultural enterprises to halt their importation of farm goods from the United States as the government tries to evaluate the ongoing escalating tensions between both nations. At least two state-owned companies have confirmed that they had been ordered to suspend all purchases of US farm goods.
According to sources familiar with the matter, state-owned companies Cofco and Sinograin have both suspended their orders of US-made farm products. The same sources claim that other Chinese buyers have canceled orders for US pork products. For now, private companies have reportedly not been told to freeze their imports.
Cofco and Sinograin are two of China's largest importers of agricultural products. The two companies reportedly had a standing order of up to 20 shipments of US-produced soybeans. Those orders have since been suspended and both companies are still waiting for any new developments before taking any further action. Sources familiar with the matter have speculated that China is likely still waiting for Trump's response before deciding on their next move.
The order to halt the importation of farm products from the US is the latest development in the ongoing trade dispute that may place the phase-one trade deal in jeopardy. China had previously reiterated its commitment to adhering to the trade deal that was signed in January, but recent tensions over the US' meddling in Hong Kong has compromised the country's resolve.
The move to limit the importation of US-made farm goods comes just days after US President Donald Trump openly criticized China for tightening its grip on Hong Kong. The issue stems from China's passing of new national security legislation in the city-state in an attempt to quell dissidents and curb civil unrest.
Trump previously stated that the US would be revoking Hong Kong's privileged trade status in light of the recent developments. He did not elaborate on the exact changes that would happen or when it would take effect. Trump also threatened to sanction all Chinese officials that were involved in the passing of the controversial law both "directly or indirectly."
Despite Trump's statements against China, the US' top economic advisers have stated that the country is still committed to pushing ahead with the phase one trade deal signed by both countries. The director of the US' National Economic Council, Larry Kudlow, mentioned in an interview that the trade agreement is still continuing and both sides are actually making progress.
Under the deal, China had agreed to buy around $36.5 billion worth of agricultural products from the US this year. However, that plan had since been derailed due to the spread of the coronavirus pandemic. So far, China has managed to import around $3.5 billion worth of US farm products in the first quarter of this year.
