China in a reaction to US parliament proposal has told state-owned firms to halt purchases of soybeans and pork from the United States, after Washington said it would eliminate special treatment for Hong Kong to punish Beijing. Large volume state purchases of US corn and cotton have also been put on hold, sources said. China could expand the order to include additional US farm goods if Washington took further action, the people said.
US President Donald Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong, ranging from extradition treatment to export controls, in response to China's plans to impose new security legislation in the territory. China reactively is ready to halt imports of more agriculture products if Washington takes more action on Hong Kong, the Chinese sources said.
Chinese importers have already cancelled 10,000 to 20,000 tonnes of American pork shipments - equivalent to roughly one week's orders in recent months - following Trump's comments. State purchases of bulk volumes of US corn and cotton have also been suspended.
In a new world order, if Trump continues to target China, Beijing will have to scrap the phase one trade deal, a second source familiar with the government plan said. "There's no way Beijing can buy goods from the US when receiving constant attacks from Trump," the person said.
China pledged to buy an additional $32bn worth of US agriculture products over two years above a baseline based on 2017 figures, under the initial trade deal the two countries signed in January. China has bought soybeans, corn, wheat and soyoil from the US this year, to fulfil its commitment under the trade deal. Beijing also stepped up purchases of US pork, after the deadly African swine fever decimated its pig herd. The US Department of Agriculture reported that China bought $1.028bn worth of soybeans and $691m of pork in the first quarter of 2020.
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