China is going to buy up to $50 billion in American farm goods thanks to Trumps "greatest and biggest deal ever," right?
That's what the White House says or at least that's what they were saying.
Trump's top economic adviser Larry Kudlow spoke to reporters at the White House today where he conceded that China's purchases will depend on consumer demand and market conditions.
The idea that they'll buy $50 billion in farm goods each year is just a "considered number," Kudlow said.
Speaking to reporters at the White House, Kudlow said the first phase of a trade deal, revealed last week, may be signed at the Asia-Pacific Economic Cooperation (APEC) forum next month in Chile, noting that the figures relating to Chinese purchases were a “considered number.”
When asked if China had guaranteed the purchases, he pointed to other factors that weigh on the total amount.
“The government gives guidance, but a lot of that stuff is done by private companies,” Kudlow said. “So market conditions, you know, prices could fluctuate, weather can move, they’ve had some terrific health scares with swine and so forth... but it is a very serious commitment.”
The big giveaway that they're never going to buy this amount of farm goods is right here in Kudlow's assertion that it will depend on private companies.
China's retaliatory tariffs on American farm goods are still on the books and private companies only import farm goods when they receive a waiver from tariffs. Furthermore, China imported a total of only $20 billion in American farm goods under ideal conditions before Trump's trade war began.
So, unless Trump's 'greatest deal ever' includes both sides eliminating their tariffs -- or unless China unilaterally repeals their tariffs or grants waivers for all of them -- private companies are never going to buy this amount of goods. They probably cannot buy this amount of goods even if we return to the status quo of 2017 with zero tariffs. They would have to more than double their previous purchases at a time when global demand including demand from Chinese consumers has slowed.
Right now, all of this looks like a bad attempt to claim victory having gained nothing throughout the entirety of Trump's trade war with China.
Chinese importers buying American farm goods based on consumer demand and market conditions is how they purchased our goods in the first place. That is the normal way of doing business. That's how business works; not that Donald Trump would know a single thing about that.