- Relationship-building with Chinese customers seen as laying foundation for an end to the dispute or potential purchases of US goods, such as soybeans
- State and regional bodies say tariffs have not stopped efforts such as taking companies to trade shows
The revival of US-China trade talks and signs that large soybean orders could be coming from China are being watched carefully in the American agricultural heartland.
Throughout the protracted trade war between Washington and Beijing, state governments and regional trade groups in the United States have continued building and maintaining ties with Chinese buyers and local governments, despite being hit hard by tariffs on their farm goods.
A delegation led by Liao Min, China's Vice-Minister for Finance, is set to take part in trade talks in Washington on Wednesday, China has said, paving the way for high-level talks next month between Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin " in which agricultural goods are expected to be high on the agenda.
This week's talks follow China's announcement last week that it would exempt some agricultural products, including soybeans, from further tariffs, opening the door to significant purchases.
Any such purchases would reward the strategy of Midwestern states and regional trade offices that have maintained ties with Chinese counterparts, in the hope that these relationships, which took years to forge, will outlast the trade war.
"To say (the tariffs) make it easier would be untrue, but now is the time to build these relationships, so that when the United States and China resolve some economic tensions we will have laid that foundation for success," said former Missouri governor Bob Holden, who is chairman of the United States Heartland China Association, a regional organisation dedicated to building ties between 20 US states and China.
Action at all levels would determine the future of US-China economic relations, he argued. "If we are able to lay the foundation at local level, at city level, at state level, then that will bubble up," he said.
State and regional trade representatives echo this sentiment, saying that their level of engagement with China has not changed, even after more than a year of the trade war, in which their key export product " soybeans " has been caught squarely in the cross hairs.
Chinese orders of US soybeans, a leading export for many states, have plummeted since they have been subject to Chinese import tariffs. The total bought between October 2018 and March 2019 was a tenth of that for the equivalent period a year earlier.
"Our level of engagement with China vis-A-vis the activities we organise in the market has not changed," said Greg Cohen, a spokesperson for the Food Export Association of the Midwest USA, a non-profit organisation that promotes the export of food and agricultural products from that region.
"The companies participating in our activities are still getting appointments with buyers and there is still strong matchmaking potential," he said, referring to trade missions and trade shows in China.
On Saturday, the US Midwestern state of Ohio and China's central Hubei province are expected to sign a memorandum of understanding regarding future soybean sales, sources say. It is one sign of a possible thaw in what has effectively been a freeze on agricultural buying, which has unsettled producers in the American Midwest over the past year.
If recent talk that a large number of soybean orders are on the way is true, that "will certainly help" the farmers who have been affected by the trade war, according to Dan Hendrix, president of the World Trade Centre Arkansas, a group housed in the University of Arkansas that works to build bilateral trade for the state.
Exporters there rely heavily on China, their third largest trading partner, and the China market "continues to be a sought-after and continuing market strategy" as long as there is fair trade, Hendrix said. Arkansas farmers hit by tariffs "continue to engage China", he added.
"After opening the World Trade Centre 12 years ago, we immediately began to engage China, taking companies to trade missions and trade shows, and we continue to do that in spite of the tariff situation that is dominating most of the conversations now.
"So much (of foreign trade) is built on establishing relationships and trust, and that has to be a continuous process. It's what keeps the momentum going."
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