BUENOS AIRES (Reuters) - The United States and China are still in the early stages of their trade war and tensions that arise from it should be considered the “new normal,” a U.S. Department of Agriculture official said on Wednesday.
Washington has tried to hold China accountable for its trade practices and not sought “quick compromises for quick resolutions” to tariffs and other issues, Mark Jekanowski, deputy chairman of the USDA World Agricultural Outlook Board, told an industry conference in Buenos Aires.
“I think that we do see as the new normal this new amount of uncertainty with China and our regular scenario is probably, for the next year or two, more similar to what last year’s scenario was,” Jekanowski said.
“We’re relatively early in the trade war,” he added.
U.S. President Donald Trump has sought to pressure China to agree to reduce trade barriers through a policy of increasing tariffs on Chinese products. On Tuesday, he accused China of the theft of trade secrets “on a grand scale” and said it was taking advantage of World Trade Organization rules.
But Trump said on Wednesday a deal to end the nearly 15-month trade war with China could happen sooner than people think. “They want to make a deal very badly ... It could happen sooner than you think,” Trump told reporters in New York.
High-level trade talks are due to restart next month.
U.S. soybean stockpiles are at record highs with the drop in demand from China, which has provided domestic soymeal plants with ample supply of beans to crush. But plants may be reluctant to invest in additional crushing capacity as a resolution of the trade war would steer more beans back into export channels.
“As of right now, when we’re relatively early in the trade war, I don’t expect that we’re going to see any big increases in soybean crushing capacity beyond maybe just normal investments,” Jekanowski said.
“We’re not factoring into our projections expectations for increased crushing capacity. We are at record crushing capacity,” he said.
Reporting by Maximilian Heath, additional reporting by Karl Plume in Chicago; Writing by Hugh Bronstein; Editing by Tom Brown