China Is Preparing to Buy U.S. LNG and Soybeans Again, Sources Say

(Bloomberg) -- Chinese officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start buying some U.S. products "immediately."

Chinese officials have been told to take necessary steps for the purchases, according to two officials with knowledge of the discussions. It wasn’t clear whether the preparations meant China would cut the retaliatory tariffs it imposed on those products, or when the purchases would happen. It is possible that Beijing could reimburse buyers for the tariffs they pay, as they have done for purchases for the state soybean reserve.

Chinese purchases of the goods collapsed after Beijing imposed tariffs on them in retaliation for U.S. import taxes. The two nations agreed to temporarily halt the spiraling exchange of tariffs over the weekend, promising to try and iron out their differences by the start of March next year.

China’s Ministry of Commerce didn’t respond to phone calls and a faxed request to comment.

Chinese imports of American soybeans fell 95 percent in October compared to last year, damaging the prospects of Midwest farmers who are in the middle of harvest. Even if the tariffs are lifted now, the U.S. crop is becoming less competitive in the Chinese market as the harvest season approaches in South America. America has probably already missed its best chance to sell soybeans to China, according to Cargill Inc., one of the world’s biggest agriculture commodity traders.

U.S. liquefied natural gas was also absent from China’s shopping list in October, following Beijing’s move in September to impose a retaliatory 10 percent tariff on U.S. supplies. Even so, Asia’s biggest gas consumer imported at least one U.S. cargo in November, according to vessel-tracking data compiled by Bloomberg, and there’s another en route. Heading into winter, Australia, Turkmenistan and Qatar were China’s top gas suppliers, according to customs.

©2018 Bloomberg L.P.