China to Boost U.S. Soybean Imports, Avoids 100% Tariff Threat

U.S.-China Trade Relations Take a Positive Turn

On Sunday, Treasury Secretary Scott Bessent indicated that the trade tensions between the United States and China are poised for significant relief, thanks to a framework he helped negotiate.

In an engaging conversation on Face the Nation with Margaret Brennan, Bessent expressed optimism that President Donald Trump's previously threatened 100% tariff would be "effectively off the table." He also noted that China’s restrictions on rare earth exports would no longer pose an immediate concern.

"The threat of the 100% tariff has diminished, and so has the potential for China to instate a worldwide export control regime," he stated, reflecting a newfound sense of cooperation between the two nations.

Upcoming Diplomatic Meeting

Trump and Chinese President Xi Jinping are set to meet this Thursday during a regional economic conference in South Korea. This meeting aims to finalize the details of the emerging trade deal.

Bessent mentioned that Trump’s 100% tariff threat, which could have pushed the overall tariff rate to over 150%, provided substantial leverage during discussions with Chinese Vice Premier He Lifeng in Malaysia over the weekend.

Focus on Agriculture and Trade Balance

During these negotiations, both parties explored American agricultural exports to China, alongside Beijing’s commitment to help mitigate the fentanyl trade issue. Farmers across the U.S. have been expressing concerns about a potential crisis in rural America, as crop prices decline while production costs remain high. This is particularly troubling as China has refrained from purchasing U.S. soybeans this harvest season, despite being a historically significant market for American farmers.

While Bessent did not disclose specific agreements, he assured that soybean farmers would be "extremely happy with this deal for this year and for the coming years." His comments come on the heels of a recent purchase of soybeans by China from Argentina, which was strategically timed to coincide with a reduction in export duties.

Global Market Dynamics

Bessent explained that these soybean transactions were anticipated in the global market and that competition remains robust among the top suppliers: Brazil, Argentina, and the U.S. "Those soybeans were always going to be on the market. It’s a global market," he noted. "I believe we have restored some equilibrium to the market, and I am confident that China will resume making substantial purchases soon."

Future of Export Controls

While Bessent hinted that China might relax its export controls on rare earth materials, he indicated that U.S. restrictions would persist. When questioned about the limits on chip exports and restrictions on Chinese investments in the U.S., he stated, "There have been no changes in our export controls."

This evolving situation highlights the complexities and interdependencies in U.S.-China trade relations, as both nations navigate the challenges and opportunities in their economic interactions.

This article was originally featured on Fortune.com