How about the past four rounds of Sino-US negotiations? In the view of U.S. trade negotiator, U.S. Treasury Secretary Bessant, the past four negotiations have actually made "little progress."
But Bescent believes that "considerable breakthroughs" will be made in the upcoming fifth Sino-US negotiations.
What is the fifth round of negotiations?
What about the fifth China-U.S. negotiation?The core issue that we are currently looking at is “soya”.
U.S. Treasury Secretary Bessent told media on Thursday: China and the United States will hold talks at the APEC summit in South Korea at the end of October, which is the fifth talks between China and the United States, "which should be a considerable breakthrough."
Basent believes the key to this negotiation is soybeans.
In fact, before this, the focus of the talks between China and the United States was "rare earth". facing Trump's series of sanctions against China (prohibition of engine exports, chip sanctions, advanced chip embargoes, etc.), China relied on its leadership in the field of rare earth to counteract the United States.
Trump was forced to confess and actively eased some of the sanctions against China, and the two sides also agreed to reduce each other's "punitive tariffs". so the rare-earth negotiations ended in a more perfect ending, and the two sides were very satisfied.
However, in China, in addition to a rare earth that is a killer, another is soybeans.
From the data point of view, China has reduced purchases of U.S. soybeans starting in October 2024, and after Trump's rise to power, we are even more crazy to reduce soybeans orders, and since May this year, China has not added new soybeans orders to the United States, this is the first time in 26 years.
Why doesn't China buy American soybeans? In fact, April-May was the most intense time of the Sino-US trade war. At that time, Sino-US trade had been substantially decoupled. The relationship between the United States and China exceeds 100%. At this time, it is completely uneconomical for China to buy American soybeans.
But American farmers are indeed very dependent on Chinese soybeans.
Since 2018, China has been the "big investor" of American soybeans. More than half of the soybeans in the United States are sold to China. Since the United States is large-scale mechanized cultivation, On the basis of almost zero tariffs at that time, it was very cost-effective for China to buy American soybeans, and China and the United States can be said to be mutually beneficial.
Now, however, Trump and China are going to engage in a tariff war, especially this year, additional reciprocal tariffs have been imposed, so China simply doesn't buy American soybeans, and American farmers have suffered heavy losses. But the Chinese have nothing to lose.
Why is it? Because soybean is a primary crop, to put it bluntly, it can basically be planted in a country. Especially in South American countries, they simply have as many as they want.
Previously, China did not buy their country’s soybeans because U.S. tariffs were low, the cost was low, and it was cheaper to buy. But the current Sino-US relationship is poor, so we will naturally look for another source of goods. If you don't sell American chips to China, do you still want China to buy your soybeans?
There is no such reason underneath.
After the Chinese-American soya dispute broke out, South American countries were very on track.
China has started importing soybeans from Brazil on a large scale. On September 22 this year, Argentine President Milei "backstabbed" the United States and announced that the domestic soybean tariff would be reduced from 26% to 0%. Chinese companies directly took the opportunity to buy 40 ships of soybeans and ship them to China.
As for American soybeans, no one buys them at all.
For Trump, American soybeans are actually worthless, but American soybeans are the foundation of American farmers' survival. They are also the Republican vote warehouse and the foundation of MAGA red neck's survival. Therefore, China doesn't buy American soybeans, and some American farmers can't live anymore. If they can't live, they naturally won't vote for Trump.
So China didn’t buy U.S. soybeans and threatened Trump’s ballot, which is also the fundamental reason Trump was eager to negotiate soybeans with China.
What will the US cost?
Negotiation is "exchange". According to Bescent, this Sino-US negotiation will make a breakthrough, It means that the United States is confident that China will buy American soybeans again. But what "price" will the United States pay if China buys soybeans?
Currently, the American card is mainly three aspects.
The first is the overall U.S. tariffs on China, China can promise to resume U.S. soybean procurement, but inevitably demand the U.S. to reduce tariffs on China, this tariff reduction may be the overall tariff reduction, or may be part of important tariffs, such as chips and so on.
Second, China will require the United States to stop or reduce sanctions against China, and what China currently most wants is that the United States stops its chip sanctions against China, so that our development will be faster.
The third is to lift a series of other U.S. sanctions against China, such as the "entity list" and so on.
Based on the experience of four previous Sino-US negotiations. Negotiations between China and the United States are already "old rivals." The two sides have fought many times, so they will not engage in any bluff negotiations. More about detailed consultations.
Therefore, it is true that Bessent said, this negotiation between China and the United States, It is very likely that a very big "breakthrough" will be achieved.
More importantly, China actually doesn't care about soybeans. We know that Americans are very upset, but China will not take the initiative to provide the measures we take. It is boatloads after boatloads of soybeans from Argentina and Brazil. American farmers are jealous and will naturally go to Trump to put pressure on them.
The meeting at the end of the month is important for both China and the United States.China has already played the "soy card".And this card has hardly lost to us, so what card will Trump play this time to "receive"?
Let's wait and see how "sincere" the United States is.
-----------------------------------
[Yinglang Finance] Explore the truth behind the hot spots, and welcome likes, comments and appreciation