China Morning Missive
There is always more that hides behind the public veil. Recall when the US and China met in London in June. The parties left the talks and the entire conversation centered on China’s agreement to resume exports of rare earth materials. There was zero commentary as to what the US side would deliver in return.
Within a matter of a single week the quid pro quo became known. The US would begin lifting certain technology related export controls.
This very same dynamic is at play with the recent trade talks in Madrid. While the focus has centered on China approving the sale of the US TikTok platform, there’s been zero focus on what the US would deliver in return.
Now we have the highly expected move by China to begin purchases of American soybeans. As background, China is the single largest export market for American soybeans with, for reference, $13bn in exports, or roughly 20% of all production, in 2024.
For this year, China has purchased zero American soybeans. The harvest has now arrive and the farmers are desperate.
China has now returned to the table and it is highly likely for a large purchase agreement to be announced in the coming weeks. That then means China has “delivered” for American twice.
All of this begs the question. What is it that the Trump team has delivered which would be of an equitable value. I will say it again. The deliverable is Taiwan.
Bloomberg.com
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