China confirmed reports that it will cease to buy U.S. agricultural products.
A spokesperson for the Chinese Ministry of Commerce said that Chinese companies have stopped purchasing U.S. agricultural products in response to U.S. President Trump’s latest 10% tariffs on additional $300 billion of Chinese goods.
The department also indicated it would “not rule out” tariffs on newly bought agricultural goods after August 3.
Previously, Trump had said that he had secured a large amount of agricultural purchases after meeting with China President Xi Jinping at the G-20 summit in June. But later, Trump alleged that China is not staying true to the agreement, and then he announced on Thursday the 10% tariffs on the remaining $300 billion in Chinese imports.
China accounted for $5.6 billion in U.S. farm product exports in 2018, according to the U.S. Census. It purchased roughly 60 percent of U.S. soybean exports last year. China is the fourth largest market for U.S. farm exports, behind Canada, Mexico and Japan.
As it is, U.S. net farm income has been declining in the past six years, even before the tariffs came into effect. And now, with China pulling out of U.S. agricultural products, U.S. farming industry’s challenges could potentially get severely exacerbated.