China shows a small gesture of goodwill ahead of Trump-Xi meeting

China’s COFCO Group is reported to have purchased three US soybean cargoes totaling 180,000 tons in what looks to be a small gesture of goodwill ahead of the Trump-Xi meeting tomorrow. So, how is this significant? Well, this is a trade issue that has been bugging Trump for the longest of time as it even dates back to his first term and was part of the whole charade of the Phase One trade deal back in 2018-19.

Anyway, the thing is China has continued to point to high tariffs in reducing their soybean imports from the US. And that led to said imports falling to zero (!) for the month of September. Much like the rare earths export curbs, this is another signal by Beijing to let the US know that they won’t be bullied going into the talks this week. But ahead of Trump’s meeting with Xi tomorrow, it seems like they’re at least showing some gesture of goodwill.

To put things in better context, China has been playing this card as and when necessary as they also did back in 2019. Even though the year-to-date shipments from the US are up some 15%, the September figures exemplify how China can easily shift things around if trade talks do not pan out.

China’s soybean imports reached 12.87 million metric tons in September, the second-highest level on record. However, shipments from Brazil were up 30% (accounting for 85% of total soybean imports) while shipments from Argentina were up 91% (accounting for 9% of total soybean imports) for the month.

Outside of what is reported above, China has not purchased any US soybean cargoes from this autumn’s harvest. So, they are definitely stringing things along to see how talks progress this week.

This article was written by Justin Low at investinglive.com.