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Trump's China trade deal won't wipe out the deficit

20 May 2017

China will allow as well the imports from the US of beef starting no later than on July 16 and the to issue a rule that allows cooked poultry from China to enter the USA market.

These agreements are the fruit of discussions between Chinese President Xi Jinping and Trump last month when they set a 100-day deadline to improve trade relations.

Late Thursday the Trump Administration announced that China has agreed to resume imports of US beef beginning no later than July 16, 2017.

In the energy sector, the U.S. already is shipping some liquefied natural gas to China and said it could negotiate any type of contract, including long-term contracts, with U.S. suppliers. Ross said officials from Dow Chemical Co. gave assurances that increasing exports of natural gas wouldn't harm the USA industry or consumers if sales remained less than 30 percent of total output.

North American Meat Institute (NAMI) chairman and Bob Evans Farms president and chief executive officer Mike Townsley responded to the news by saying, "The meat industry has long sought access to the Chinese market for US beef, making today's announcement a significant and very welcome milestone". The agreement is seen as an indication that U.S. President Donald Trump is adopting a less confrontational approach with Beijing than he promised during last year's election campaign.

Most of China's demand needs are already met by long-term supply agreements, although new buyers are expected to emerge in the coming years as the country cuts back use of coal in power generation and manufacturing.

Ker Gibbs the American Chamber of Commerce in Shanghai chairman said the new measures were a good start but did not represent a breakthrough.

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"People were anxious about what Trump was going to do, talking tough on exports, but talking tough is what we need, so we're happy to see it".

"Past foot-dragging means we won't celebrate until these promises are executed", Gibbs said, calling the opening in the electronic payments market "mainly symbolic".

"We will continue to move forward", Chinese Vice Finance Minister Zhu Guangyao told a Beijing media briefing.

"The 100-day talks are just a start", said Zhou Shijian, an global relations professor at Tsinghua University in Beijing. "That is a huge shot in the arm for market access and opportunities for USA beef".

Foreign-owned firms will be allowed to offer credit-rating services in China by July 16.

Although there are limited supplies of U.S. hormone-free beef available, there would be limited scope for the United States to supply China with beef at any volume without a change in attitude.

China will issue licences to two American financial institutions to underwrite bonds by July 16.

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According to the officials of Trump's administration, it is a serious step.

The United States is fast becoming a major LNG exporter, though few of its export cargoes to date have been shipped to China.

"The agreement connects the US, the fastest growing LNG supplier, with China, the largest LNG growth market", said Massimo Di-Odoardo, Head of Global Gas and LNG research at consultancy Wood Mackenzie. American supplies accounted for nearly 7 percent of China's total imports in March, customs data shows.

However, he's optimistic about the future now that a new trade deal has been reached.

Both parties are said to have reached a consensus agreement on ten different areas, including shipments of US beef to China by mid-July 2017.

Lubbock cattleman Hadley Mann said the partnership was "something that we needed in the market from the get-go". "We do not intend to endanger anybody's health or safety in the USA", he said. Again, this sounds like a win but the U.S. has already won a WTO trade dispute against China on these payment systems.

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