P.J. Quaid, a corn options broker at the CME Group in Chicago, said he’s eager to learn how the White House plans to enforce the tenets of the phase one deal if Beijing skirts its obligations.
“This thing’s been a crazy roller coaster since it started. A lot of people have become pessimistic because a lot of the purchases they said they’re going to make seem hard to attain,” Quaid said.
“If this thing comes in under expectations, you could see sell-off,” he added. “It’s been a rough time for people trading Ags.” The Office of the United States Trade Representative did not return CNBC’s request for comment.
Others were cautious after a Chinese media report suggested that Beijing isn’t as upbeat on the prospect for future trade talks. Taoran Notes, a blog run by a state-owned newspaper called Economic Daily, published its first blog post in two months on Sunday.
“We need to bear in mind that the trade war is not over yet. The U.S. hasn’t removed all the tariffs on Chinese imports and China is still imposing its retaliatory duties,” the blog wrote according to a CNBC translation. “There are still so many uncertainties ahead.”
For Don Roose, president of Des Moines, Iowa-based brokerage U.S. Commodities, China’s commitments to farm purchases are key.
“We’re anticipating $35 billion [of farm purchases] the first year and $40 billion in the second,” he said. “It doesn’t look like we’re creating any new world demand.” But unresolved, Roose said, is whether the Chinese will — after years of haggling — actually end up buying more U.S. farm goods than before President Donald Trump opened the trade spat nearly two years ago.
Still, Roose said he was slightly more optimistic with a phase one deal nearly signed.
“There’s always a question mark, but if they want to get to ‘phase two,’ they’re going to have to show some solid follow-through,” he said.
Source Article from https://www.cnbc.com/2020/01/13/heres-whats-in-the-phase-one-china-trade-deal-trump-is-signing-this-week.html
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