It is widely anticipated that Washington will urge China to pledge significant acquisitions of US products during trade talks in Sweden this week, yet recent customs data indicates that Chinese imports of numerous American commodities have sharply declined or even ceased altogether.
Representatives from Beijing and Washingtonstart a vital third round of trade negotiationsin Stockholm on Monday, as numerous analysts anticipate the US will concentrate on obtaining Chinese commitments to purchase additional American oil, liquefied natural gas, and other products.
The discussions took place a day following the US reaching a preliminary trade agreement with the European Union, which involved an EU promise toramp up importsAmerican energy and military equipment, along with the US imposing a 15 percent tariff on EU products.
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"The administration of Trump is working on a 'phase two' trade agreement and plans to ask for significant purchases of American goods, such as energy, along with direct investment in the production and export capabilities of US commodities," stated Matt Gertken, chief geopolitical strategist at BCA Research in Canada.
However, he mentioned that "the US-China national security rivalry will compel China to restrict reliance on the US."
China has historically been a significant purchaser of U.S. energy and agricultural goods, but in recent months, imports of various American commodities have dropped sharply or come to a complete halt due to rising tensions between the two nations over multiple trade and technology-related matters.
LNG imports from the US into China fell by 66 percent compared to the previous year in February, reaching 65,750 tonnes, and then completely stopped between March and June, as per Chinese customs statistics.
The nation's imports of US crude oil in the first five months of the year amounted to only 136,400 tonnes, representing a 68 per cent drop compared to the previous year. Meanwhile, imports of US coking coal through April fell by 87 per cent year on year to 76,200 tonnes, according to official statistics. China's purchases of both products from the United States virtually stopped in May and April, respectively, as per the data.
Wang Yiwei, a professor of international relations at Renmin University in Beijing, stated that US-China energy agreements had come to a standstill as purchasers and suppliers aimed to "avoid complications" duringsharp fluctuations in US and Chinese import duties and exchange rates.
"Large-scale trade deals related to energy and raw materials demand extensive preparation beforehand," he stated.
To prevent unnecessary efforts, both parties maintain a wait-and-see stance and halt trade - this is why certain (China's) import numbers were zero.
In the farming industry, China's purchases of corn from the United States dropped by 92.84 percent compared to the same period last year, reaching 785,143 tonnes in the first half of the year, according to official data. Its imports of American beef decreased to 1.3 million tonnes, a reduction of 9.47 percent from the previous year.
Lynn Song, the head of economics for Greater China at the Dutch bank ING, mentioned that energy and agricultural goods might be the key areas in a possible trade deal between China and the United States.
These categories are the most standardised, and therefore the products that can have the most adaptable sources of import," he stated. "Apart from high-tech exports, other US-made products typically would not be competitive in the Chinese market, making it challenging to increase such imports.
Mark Williams, the chief Asia economist at Capital Economics, stated that energy would probably be a central aspect of any trade agreement, as China's acquisitions have recently declined, and oil, coal, and natural gas from various providers could be "fairly easily replaced."
I believe there's a strong possibility that China would honor any future agreements to purchase US energy," he said. "The 'phase two' deal could face difficulties in more intricate goods and services, where there might be a discrepancy between what President Trump aims to sell and what China's economy requires.
China and the United States reached a 'phase one' trade agreement in early 2020, near the conclusion of U.S. President Donald Trump's initial term, which involved China pledging to purchase an extra $200 billion in American goods and services over the subsequent years, compared to 2017 figures.
However, a report from the Peterson Institute for International Economics indicated that China only acquired 57 percent of the U.S. exports it had agreed to buy under the agreement.
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This piece was first published in the South China Morning Post (www.scmp.com), a top news outlet covering China and Asia.
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