China has reportedly resumed its U.S. wheat purchases after a pause of more than a year, following the recent meeting between the leaders of the two countries, indicating a potential reduction in trade tensions.
A ‘Political’ Move By China?
China has procured two cargoes of U.S. wheat. The purchase of approximately 120,000 metric tons of U.S. wheat for December shipment includes one cargo of U.S. soft white wheat and one of spring wheat, Reuters reported on Thursday. This marks the first such purchase since October 2024 and is seen as a positive sign for the trade relationship between the two nations.
Another encouraging development on the trade front is the resumption of U.S. sorghum exports to China following the meeting between Presidents Donald Trump and Chinese President Xi Jinping, the chairman of the U.S. Grains and BioProducts Council, Mark Wilson, confirmed to Reuters.
One Singapore-based grains trader, with direct knowledge of the deals, told the publication that the purchase is a “political” move to display China’s commitment to buying U.S. grains, despite U.S. wheat not being the “cheapest” option.
Ahead of the Trump-Xi meeting, there were also reports that China had resumed the purchase of soybeans ordered approximately 180,000 metric tons to be shipped in December.
Trade Truce Brings Fragile Calm, Say Experts
The recent developments in the U.S.-China trade relationship have been significant. China’s decision to ease tariffs on U.S. goods and scrap 15% farm levies following a trade truce with the U.S. has been a crucial step in improving trade relations. Meanwhile, the U.S. also slashed fentanyl tariffs on China by 10%.
Additionally, China’s agreement to lift restrictions on rare earth mineral exports as part of a broader trade deal has further indicated a willingness to cooperate with the U.S.
While both sides may be experiencing a brief respite, underlying tensions persist, as per experts. “The worst of the trade war appears to be behind us,” said Roman Ziruk, senior analyst at Ebury, “but the relationship will need to be managed carefully.”
Louise Loo, head of Asia economics at Oxford Economics, cautioned that "the four Ts"—Taiwan, transshipments, TikTok, and technology—remain sticking points, making the current calm "more of a pause than a pivot."
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
