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July 24, 2019 11:00 AM, EDT

China Approves Tariff-Free US Soybean Purchases

SoybeansBloomberg News

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The Chinese government has given the go-ahead for five companies to buy up to 3 million tons of U.S. soybeans free of retaliatory import tariffs as trade negotiations between the two nations continue, according to people familiar with the situation.

The retaliatory tariff-free quota for 2 million to 3 million tons will be part of a goodwill gesture toward the U.S., and there could be a second round of exemptions depending on how the trade talks progress, two of the people said, declining to be identified as the information is private.

Among the companies is state-owned Jiusan Group as well as privately-run Shandong Bohi Industry Co. and China Sea (Zhonghai) Grain and Oil Industry Co., the people said. Yihai Kerry Group, a Chinese subsidiary of Singapore-based Wilmar International Ltd., and Hopefull Grain & Oil Group are also among the firms, said the people.

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China’s commerce ministry didn’t respond to a fax seeking comment outside normal business hours.

Senior U.S. officials are set to travel to China on July 29 for the first high-level, face-to-face negotiations since talks broke down in May. President Donald Trump had complained that China hasn’t increased its purchases of American farm products, a promise he said was secured at a meeting with Xi Jinping at the Group of 20 summit in Osaka last month.

The decision on the soybean purchases follows a meeting between the Chinese government and soybean buyers July 19 in Beijing to discuss the plan. After China adopted 25% tariffs on U.S. soybeans in July 2018, imports by the world’s biggest consumer had plummeted to almost zero toward the end of last year.