Trump eyes trade agreement with China in March
US president Donald Trump said today he expects to meet with his Chinese counterpart, Xi Jinping, next month to work out final details of an agreement resolving trade disputes between the two countries.
In the meantime, Trump said he likely will delay the increase in US tariff rates on $200bn/yr of imports from China, scheduled to increase to 25pc from 10pc on 2 March. Trump said the meeting with Xi could possibly take place at Trump's Mar-a-Lago property in Florida.
"We have a one time shot at making a deal between our countries," Trump said in the White House, in the presence of senior US and Chinese trade negotiators. The latest round of talks, which started yesterday, will be extended until 24 February to give the delegations more time to finalize the terms.
"Our expectation is to conclude this quickly and get to the point over the next few days of making progress and recommending a meeting between you and president Xi in March," treasury secretary Steven Mnuchin said.
"We made progress on some very important structural issues, but we have a few big hurdles we still have to face," US trade representative Robert Lighthizer said, in reference to Washington's insistence on guarantees to cut the US trade deficit, implement stronger IP protections and end forced technology transfers.
The US wants a pledge from Beijing that it will increase imports of agricultural, energy commodities and other US products in a bid to eliminate a $370bn/yr trade deficit. Trump said the US has also secured an agreement from Beijing to prevent "currency manipulation" — even though the US Treasury Department does not accuse China of that practice.
US and Chinese negotiators have prepared a number of memorandums of understanding (MoU) to document binding commitments from Beijing on buying specific products, Lighthizer and Mnuchin said, only to be overruled on the spot by Trump.
"Why do you bother putting it in the form of a letter of intent or whatever you wanna call it," Trump said. "An MoU is not a contract to the extent we want." Trump said he preferred all side deals to be combined into a comprehensive agreement he can sign with Xi.
"From now on, we will never use 'MoU,' we will use 'trade agreement,'" Lighthizer said.
"We believe it is very likely an agreement will happen and we believe we ultimately will succeed," China's vice premiere Liu He said.
Liu read a letter from Xi, who said possible progress in trade talks would be "well received in both countries and the international community" — emphasizing that the ongoing trade war is having a negative effect on economic growth in the US and China.
A delay in the tariff hike means the Xi-Trump summit will take place after the annual national legislative assembly meeting in Beijing in early March, an occasion China's leaders use to preview major changes in government policies.
Trump said he may be even willing to discuss setting aside financial fraud charges the US Department of Justice has brought against Chinese telecommunications firm Huawei, as part of a comprehensive deal. "We may or may not include it with this deal. I will have to discuss it with the attorney general," Trump said.
The trade war with China cut off a growing market for US oil and LNG exports in the second half of 2018. China took a small amount of US crude in November — a total of 250,000 bl for the month or 8,300 b/d — after exports stopped in the previous three months, US government data show. By comparison, China took an average of 377,000 b/d of US crude in January-July 2018 and was consistently the first or second top destination for US crude.
Trump last month announced a commitment from Xi to buy an additional 5mn t of US soybeans, which compares with 7.93mn t US exported to China in January-September 2018.
But US agriculture secretary Sonny Perdue declined to offer more details on the amount of US agricultural goods that China could buy, saying it would be "very premature" to offer specifics because they were contingent on a "grand deal" coming together and resolving core issues of structural reform.
Related news posts
Texas barge collision shuts GIWW section: Correction
Texas barge collision shuts GIWW section: Correction
Corrects volume of oil carried by barge in fourth paragraph. Houston, 16 May (Argus) — Authorities closed a six-mile section of the Gulf Intracoastal Waterway (GIWW) near Galveston, Texas, because of an oil spill caused by a barge collision with the Pelican Island causeway bridge. The section between mile markers 351.5 and 357.5 along the waterway closed, according to the US Coast Guard. A barge broke away from the Philip George tugboat and hit the bridge between Pelican Island and Galveston around 11am ET today. Concrete from the bridge fell onto the barge and triggered an oil leak. The barge can hold up to 30,000 bl oil, but it was unknown how full the barge was before the crash, Galveston County county judge Mark Henry said. It was unclear when the waterway would reopen. An environmental cleanup crew was on the scene along with the US Coast Guard and Texas Department of Transportation to assess the damage. Multiple state agencies have debated the replacement of the 64-year-old bridge for several years, Henry said. The rail line alongside the bridge collapsed. Marine traffic does not pass under the bridge. By Meghan Yoyotte Intracoastal Waterway at Galveston Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Sinking crop values weigh on US farmer profits in 2024
Sinking crop values weigh on US farmer profits in 2024
Houston, 16 May (Argus) — The cycle of above-average profits that has defined the US agricultural economy in recent seasons is fraying this year as crop prices slacken against elevated expenses. The domestic agricultural sector is forecast to endure a 24pc drop in net cash income this season — the sharpest year-over-year decline in the last decade — underpinned by a 6pc slump in crop sales revenue and modest growth in projected expenses, according to the US Department of Agriculture's (USDA) latest industry income statement. This retraction, which kicked off in 2023, forced many growers in key agricultural districts this season to augment non-real estate loans, slow debt repayment and restructure existing loans to meet liquidity requirements thanks in part to sliding global grain and oilseed prices. Lenders within the seventh and 10th Federal Reserve districts, which represent farmers across major growing regions, reported stronger loan demand and tightened working capital during the first quarter — signaling deteriorating farm finances. Working capital is measured as the difference between the value of assets that can be easily converted to cash and debt due within the next 12 months. Lower working capital valuation signals the ability to pay down debt could be challenged. Domestic agricultural working capital this year is estimated 17pc lower from 2023 and 6pc lower than the five-year average, according to USDA data. "Conditions in the US farm economy have tightened alongside lower prices for many key products and higher financing costs," the Federal Reserve Bank of Kansas City reported in its quarterly Ag Credit Survey . "Many lenders highlighted growing concerns about deterioration in working capital as a result of low prices, particularly for crop producers." US row-crop growers are expected to endure another season of price deterioration as global markets adjust to supply shocks stemming from the ongoing war in Ukraine that rattled wheat values and key input prices for corn and soybeans. Domestic corn, soybean and wheat farm cash prices are projected to slump for a second consecutive season by 5pc, 11pc and 15pc, respectively, according to the latest projections from the USDA's World Agricultural Supply and Demand (WASDE) report. Corn growers, specifically, face losses this season amid a 4.6mn-acre cut in planted area from last season in tandem with sinking crop values. Margins are estimated -$65.75/acre, based on the latest new-crop contract close and early-season production volume estimates, after benefiting from peak earnings at $242.33/acre in 2022. Corn is a fertilizer-intensive crop, and changes in farmer profitability can erode input prices. Urea, the most widely traded fertilizer globally, is strongly tied to front-month corn futures and domestic barge prices have sunk to levels last seen in January 2021, tracking lower front-month corn futures since the start of the 2023-24 fertilizer season. Fertilizer expenses account for nearly 40pc of annual operating costs for domestic corn growers on a per-acre basis, with seed costs comprising an average 25pc, according to Argus analysis of USDA data. Plant nutrition expenses, though, surged in 2022 and remained above average in 2023 — reflecting historically elevated fertilizer prices during the same period. The USDA forecasts a 15pc dip in fertilizer costs in 2024 for corn growers, providing some reprieve compared with the last two years despite higher seed and various overhead expenses. "Factors like the rising costs of seeds, fertilizers and other inputs as well as more strict environmental regulations, specifically on water usage, have added to the financial and administrative burden for farmers," said Donnie Taylor, Agricultural Retailers Association senior vice-president of membership and corporate relations. By Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Dangote seeks 2mn bl/month WTI crude for 12 months
Dangote seeks 2mn bl/month WTI crude for 12 months
London, 16 May (Argus) — Nigeria's 650,000 b/d capacity Dangote refinery has issued a tender for the supply of 2mn bl of US WTI crude each month, for 12 months starting in July, according to a tender document seen by Argus . Dangote will accept offers on a delivered cif basis to Lekki, Nigeria, and on a fob basis from Houston and Corpus Christi, Tx. It was not stated whether the fob offers would be against WTI or Brent. The tender closes on 21 May. Dangote came online at the end of 2023 and its throughout capacity is planned to reach around 350,000 b/d a its first phase of operations. The refinery received its first crude cargo on 6 December and since then deliveries have averaged 179,000 b/d, according to data from Vortexa. Light sweet WTI accounted for 42,000 b/d, or 23pc of the total. By Lina Bulyk and Kuganiga Kuganeswaran Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Mol orders dual-fuel LPG, ammonia VLGCs
Japan’s Mol orders dual-fuel LPG, ammonia VLGCs
Tokyo, 16 May (Argus) — Japanese shipping firm Mitsui OSK Lines (Mol) has ordered two dual-fuel very large gas carriers (VLGCs) to deliver LPG and ammonia, with commissioning expected in 2026. Mol has reached a deal with TotalEnergies' shipping arm CSSA Chartering and Shipping Services to charter two 88,000m³ VLGCs to deliver LPG and ammonia, although the specific time period is undisclosed. The vessel will be built by South Korean shipbuilder Hyundai Samho Heavy Industries, which has developed an engine that can use LPG and fuel oil. Japan's LPG consumption totalled 11.8mn t in the 2023-24 fiscal year ending 31 March, down by 3.2pc from a year earlier, according to the Japan LP Gas Association. Japan's trade and industry ministry expects the downwards trend will be driven further by technology innovation of high efficiency equipment. But its expects ammonia demand as a fuel to increase to 3mn t/yr by 2030 and to 30mn t/yr by 2050. Japan has set a goal of a 20pc ammonia co-firing at domestic coal-fired power plants by 2030 and above 50pc by 2050 to achieve the country's 2050 decarbonisation goal. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more