China reportedly bought $180 million worth of US soybeans, and it's the first concrete sign of a truce between Trump and Xi

  • China reportedly bought more than 500,000 tons of US soybeans, worth around $180 million.
  • China promised to purchase US soybeans as part of the preliminary deal forged by President Donald Trump and Chinese President Xi Jinping.
  • China is the largest market for US soybeans, making up over 60% of total exports in 2017.
  • China's tariffs on US soybeans had caused exports to dive and wrecked many American farmers.

Chinese state-owned firms made a huge order of soybeans on Wednesday, according to a new report, the first concrete sign that Beijing is following through on promises made as part of the trade war truce.

Reuters, citing two US commodity traders, reported that state-owned firms bought more than 500,000 tons of soybeans worth roughly $180 million on Wednesday. Chinese purchases of soybeans had collapsed by more than 90% since President Donald Trump's tariffs caused Beijing to respond with tariffs of their own on US crops.

RELATED: Take a look at the Chinese products Trump's tariffs have hit the hardest: 

60 PHOTOS
Products directly hit by Trump's tariffs on Chinese goods
See Gallery
Products directly hit by Trump's tariffs on Chinese goods
Meat: pork; beef intestine; rabbit meat; venison; frog legs
Fish and seafood:live fish including ornamental fish, trout, eels, tuna, and carp; chilled or frozen meat of various types of trout, salmon, halibut, plaice, sole, albacore, tuna, herring, mackerel, cobia, swordfish, pollack, whiting, catfish, rays, and more; various types of salted or smoked fish; other seafood including various types of lobsters, crabs, shrimps, prawns, oysters, scallops, mussels, clams, squid, octopus, conchs, abalone, sea cucumbers, and sea urchins.
Non-meat animal products such as eggs and dairy:Whey products; butter; various types of eggs including chicken; honey; hair of animals including human, hog, horse and badger; animal intestines, bladders; feathers; bones including shells, beaks, corals, hooves, antlers, and more.
Vegetables:onions; garlic; cauliflower and broccoli; cabbage; carrots; turnips; radishes; beats; cucumbers; peas of various types; beans; lentils; celery; mushrooms; peppers of various types; squash; okra; sweet corn; potatoes; sweet potatoes and yams; some types of tomatoes; spinach; Brussels sprouts.
Fruit and Nuts: Coconuts; cashews; almonds; hazelnuts; walnuts; chestnuts; pistachios; macadamia nuts; pecans; dates; figs; pineapples; guavas; oranges; mandarins; clementines; raisins; grapes; apples; pears; quinces; peaches; berries including strawberries, raspberries, cranberries, blueberries and others; bananas; a variety of dried fruits; peels of various fruits.
Cereals: wheat, including durum wheat; barley; oats; corn; various types of rice; grain sorghum; buckwheat; quinoa; and more.
Mill products: flours including those form wheat, corn, buckwheat, rice, rye, other cereals, potatoes, and bananas; groats and meal of various types including wheat, corn, oats, and rice; malt; starches of wheat, corn, potato, and more
Oil seeds: soybeans; seeds of sunflower, flax seed, sesame, mustard, poppy and more; planting seeds for certain crops; cocoas and mint leaves; and seaweeds.
Sugars and candies: cane sugar; candies with no cocoa
Breads and Pasta: uncooked pasta; various breads, pastries, cakes, and biscuits.
Prepared vegetables and fruits: various vegetables and fruits previously listen in their prepared or preserved forms; various fruit jams including strawberry, pineapple, apricot, and more; peanut butter; various fruit juices including orange, pineapple, lime, grape, apple, and more.
Other food items: soy sauce; condiments and seasonings; protein concentrates.
Beverages and vinegars: water, including mineral water; fruit or vegetable juices and juice mixes; beer from malt; wine, including rice wine; ethyl alcohol; vinegars
Food processing waste and animal feed: brans from processing; oil cakes; dog or cat food; animal feed
Tobacco products: various types and preparations of tobacco; tobacco refuse; cigars; cigarettes; smoking tobacco
Salts and minerals: salt/sodium chloride; sulfur; graphite; quartz; types of clays; chalk; slate; marble; granite; sandstone; dolomite; gypsum; some plasters; some types of cement; mica; Epsom salts
Ores, slag, and ash: ores of iron, copper, nickel, cobalt, aluminum, lead, zinc, tin, chromium, tungsten, uranium, titanium, silver, other precious metals, and others; slag, various types of ash.
Mineral fuels and oils: coal; lignite; peat; coke; tars; various types of light oil; various types of kerosene; petroleum oils; liquefied fuels including natural gas, propane, butane, ethylene, and petroleum; oil shale and tar sands
Inorganic Chemicals: chemicals such as chlorine, sulfur; carbon, nitrogen, oxygen, and silicon; acids including sulfuric, nitric, and more; various types of fluorides, chlorides, sulfates, nitrates, carbonates, and more.
Organic chemicals
Fertilizers: animal or vegetable fertilizers; urea; ammonium sulfate; sodium nitrate; and more.
Tanning and drying extracts, dyes, and paints
Essential oils, perfumes: perfume; lip or eye make up preparations; manicure or pedicure products; shampoo; hairspray; bath salts.
Soaps and cleaning products: various types of soap; leather and textile treatments; polishes for shoes and furniture.
Glues, adhesives, and enzymes
Cigarette lighter fluid
Photographic goods: various types of photo plates; instant film; various types of film in rolls; various types of motion picture film.
Various chemical products: pesticides; herbicides; fungicides
Plastics: vinyl flooring and other plastic floor and wall coverings; sausage casings; bags; gloves including baseball gloves; rain jackets; machinery belts.
Rubber: latex; rods, tubes, and other products; conveyor belts; various types of transmission belts; various types of pneumatic tires; gloves; gaskets; dock fenders.
Raw hides and leather: animal skins including cow, buffalo, sheep, goats, reptile; various types of leather made from cow, buffalo, sheep, goats, reptile; leather trunks and suitcases; leather handbags; CD cases; gloves including ski, ice hockey, and typical use; belts; fur clothing, incluidng artificial fur.
Wood: fuel wood; charcoal; various types of wood including oak, beech, maple, ash and cherry; moldings; rods; particleboard; various types of plywood; doors; corks and stoppers; wicker and bamboo baskets.
Wood pulp products
Paper: Newsprint; writing paper; vegetable parchment; carbon paper; self-adhesive paper; cigarette paper; envelopes; tablecloths; handkerchiefs; folders.
Silk
Wool or animal hair products: cashmere; yarns; tapestries and upholstery.
Cotton: fibers; thread; yarn; denim; satin.
Flax: yarn; fabrics
Man-made textiles: polypropylene; rayon; nylon; polyester
Other textile products, rope, twine: hammocks; fish nets; carpets;
Fabrics: corduroy; gauze; terry towel; lace; badges; embroidery
Headgear: caps; hairnets; wool hats; head bands
Stone, plaster, cement, asbestos: stone for art; marble slabs; roofing slate; millstones; sandpaper; floor or wall tiles; cement bricks.
Ceramics: fire bricks; pipes; tiles; porcelain and china.
Glass and glassware: balls; rods; drawn or blown glass; float glass; tempered safety glass; mirrors; carboys, bottles, jars, pots, flasks, and other containers; microscope slides; woven fiberglass
Precious stones and pearls: industrial diamonds; silver and products made of silver; gold and products made of gold; platinum; palladium.
Iron and steel and products derived from the metals:drums; tubes; pipes; doors; windows; screws; horseshoes;
Copper: plates; cables; tubes; pipes; springs
Nickel: bars; rods; wires
Aluminum:powder; cable; wire; screws.
Various metal products, tools, cutlery: industrial items made from lead, zinc, tin, and more; saw blades; bolt cutters; hammers; wrenches; crow bars.
Machinery, both industrial and retail: steam turbines; engines; fuel-injection pumps; air compressors; air conditioning machines; refrigerators; cream separators; hydraulic jacks; escalators; manure spreaders; copiers; automatic beverage-vending machines
Electronics: vacuum cleaners; hair clippers; spark plugs; generators; bicycle lights; electric amps; television cameras; various types of TVs; video projectors.
Vehicles and parts: axles; driving shafts; gear boxes; radiators.
Parachutes

Ships and boats: sailboats; motorboats; canoes; yachts.

Instruments for scientific or medical purposes: microscopes; cameras for non-art purposes; gauges for pressure, electrical currents, and more.
Clocks and watches
Furniture, bedding, mattresses: car seats; wood chairs; furniture designed for offices, kitchens, and more; mattresses; chandeliers; lamps.

Assorted items: buttons; stamps; paintings; collections of zoological, botanical, mineralogical, anatomical, historical, archaeological interest; antiques of an age exceeding one hundred years

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

China was the largest market for US soybeans in 2017, accounting for around $14 billion in sales — more than 60% of total soybean exports. Soybean exports to China accounted for around 10% of the total value of all US agricultural exports last year.

But tariffs on US soybeans and ongoing trade war caused the amount of soybeans heading to China to drop to nearly zero, despite October and November typically representing the peak season.

The lack of sales has left US farmers in a rough spot. Prices plunged due to oversupply, and a large number of soybeans were left rotting in fields.

While the 500,000 ton purchase is small solace for farmers, a continued commitment to increasing purchases by the Chinese would be a welcome sign.

soybean exports to chinaUSDA

The move also shows that Beijing is perhaps serious about following through on promises made during Trump and Chinese President Xi Jinping's dinner at the G20 meeting in Buenos Aires, Argentina.

On Tuesday, Chinese Vice Premier Liu He — the country's top trade negotiator — promised US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin that China would soon deliver on short-term fixes like soybean purchases and lowering of tariffs on US-made cars.

The news also comes after reports that Beijing plans to drop its Made in China 2025 plan, a medium-term strategy for economic dominance. While the move may be largely symbolic, Trump has railed against the plan since the start of the trade war.

The purchases will also ease Chinese concerns about soybean supply. The country uses the beans as feed for the large number of hogs in China and had been relying on producers like Brazil and Argentina to meet the shortfall.

NOW WATCH: Anthony Scaramucci claims Trump isn't a nationalist: 'He likes saying that because it irks these intellectual elitists'

More from Business Insider: 
China looks like it's going to give Trump a huge symbolic trade war win, fueling hope for a big deal 
Trump promises China is 'back in the market' for US soybeans, but government data suggests otherwise 
We're finally seeing some encouraging signs in the US-China trade war

SEE ALSO: China looks like it's going to give Trump a huge symbolic trade war win, fueling hope for a big deal

Read Full Story
  • DJI25352.39-424.22-1.65%
    NASDAQ7594.52-156.32-2.02%
  • NIKKEI 22521151.14-132.23-0.62%
    Hang Seng27267.13-438.81-1.58%
    DAX11952.41-216.33-1.78%
  • USD (PER EUR)1.120.00250.22%
    USD (PER CHF)1.000.00540.55%
    JPY (PER USD)109.55-0.7800-0.71%
    GBP (PER USD)1.270.00140.11%