Chinese authorities have ordered state commodity traders Cofco and Sinograin to suspend the purchase of certain types of U.S. agricultural products, including soybeans, Bloomberg reported citing informed sources.
Chinese companies have also canceled some pork orders from the United States. Private companies have not received any orders, said one of the sources. Actions of the Chinese authorities show that the trade deal concluded with great difficulty by Washington and Beijing in January 2020 is under threat, experts say.
Chinese Premier of the State Council Li Keqiang said in May that China intends to comply with the terms of the agreement, but the increase in tensions between the two countries in recent days could have affected the situation. Beijing assesses the actions taken by the U.S. authorities in response to its plans to strengthen control over Hong Kong.
Relations between Washington and Beijing have seriously deteriorated after China decided to develop its own national security law for Hong Kong. President Donald Trump said last Friday that the United States will deprive Hong Kong of its privileged status because it is no longer a separate part of China.
In addition to revoking Hong Kong’s status as a separate customs territory, the U.S. intends to impose sanctions on officials who “directly or indirectly undermine Hong Kong’s autonomy. In his speech, however, Trump did not say that the U.S. intends to withdraw from the trade agreement with China.
According to one source, Cofco and Sinograin, the main U.S. agricultural importers, on Friday made inquiries about the value of 20 to 30 lots of U.S. soybeans but refused to enter into transactions after Trump announced about the forthcoming sanctions. Beijing awaits further steps from Trump before deciding what to do next, the source said.