Explainer: What extra U.S. farm products could China buy?

FILE PHOTO: Corn is loaded onto a truck as a silo is emptied at a farm in Tiskilwa, Illinois, U.S., July 6, 2018. REUTERS/Daniel Acker/File Photo

BEIJING (Reuters) – China has agreed to make unspecified new purchases of farm products from the United States, President Donald Trump said after meeting his Chinese counterpart Xi Jinping in Japan.

China was the top buyer on average of U.S. agriculture exports from 2010 to 2017, making purchases worth $21.6 billion a year, U.S. Department of Agriculture (USDA) showed.

While investors await details of the agreement and confirmation from China, analysts and traders say there are limits to how much more China can buy from the country that is typically one of its top suppliers of soybeans, grains and meat.

Below are details of where future Chinese purchases could rise.

SOYBEANS

The United States is usually China’s No. 2 supplier of soybeans, a product likely to make the list of new purchases even though an African swine fever epidemic in China has dented demand from Chinese pig farmers.

Soybean imports in the 2019/20 crop year are forecast by USDA at 87 million tonnes.

The USDA reported a large soybean sale on Friday of 544,000 tonnes to China, an apparent goodwill gesture a day before Trump and Xi met for the first time in seven months.

There could be a few more similar purchases in coming months as tensions ease, said Darin Friedrichs, senior Asia commodity analyst at INTL FCStone.

But any large deals were expected to be conditional on progress in talks and would be made over a long timeframe, he added.

GRAINS

China has typically been the top buyer of U.S. sorghum and, despite a 25% U.S. trade tariff on the grain, it has still bought a few cargoes in recent months.

But sorghum prices are rising, making it less viable for Chinese buyers to import the grain when they already face such a high tariff.

Demand for sorghum and corn, whose prices have climbed due to adverse weather conditions, were both very weak because of the African swine fever epidemic, said a trader with a state-owned firm who was not allowed to be identified.

“I don’t think chances are high” for more purchases, he said.

Regarding Dried Distillers Grains with Solubles (DDGS), China has announced it would keep anti-dumping duties on the feed ingredient, which the trader said made it clear Beijing did not plan to boost its imports.

Purchases of U.S. wheat have historically been relatively small. Beijing has been pushing Chinese growers to plant more high-quality wheat and boosting imports would undermine this policy, said a Chinese trader, who was not allowed to be identified.

ETHANOL

U.S. ethanol imports could feature in upcoming purchases, said Friedrichs, helping Trump win support from ethanol producers, one of his voter bases which has been hit by waning Chinese demand and U.S. initiatives affecting the industry.

But Chinese trade tariffs are prohibitive and there are no government reserves for the biofuel, limiting the amount that could be purchased by state buyers under Beijing’s orders, said an industry source who was not allowed to be quoted.

PORK

China, which usually accounts for half the world’s pork production, is expected to need all the pork it can find abroad as African swine fever devastates domestic farms.

It has already made some large purchases from the United States, even with U.S. trade tariffs of 50% in place.

Still, much bigger exports of pork to China threaten to drive up prices in the United States, which would hurt U.S. consumers and runs the risk of backfiring on Trump as he seeks re-election, Friedrichs said.

(Reporting by Dominique Patton and Hallie Gu; Editing by Edmund Blair)

Rouhani warns U.S. over preventing Iran from exporting oil: ISNA

NEW YORK (Reuters) – Iranian President Hassan Rouhani on Monday cautioned the United States about pursuing hostile policies against Tehran, saying preventing Iran from exporting oil would be “very dangerous”, but he did not rule out talks between the two countries.

“Imposing sanctions on Iran to prevent us from selling our oil will be very dangerous … If (U.S. President Donald) Trump wants to talk to Iran, then he first should return to the (2015) nuclear deal first,” the ISNA news agency quoted Rouhani as saying in a meeting with senior editors of foreign media in New York.

Rouhani is in New York for the annual United Nations General Assembly.

In May, Trump pulled out of the international nuclear deal with Iran and announced sanctions against the OPEC member. Washington is pushing allies to cut imports of Iranian oil to zero and will impose a new round of sanctions on Iranian oil sales in November.

Under the accord, most international sanctions against Tehran were lifted in 2016 in exchange for Iran curbing its nuclear program.

(Writing by Parisa Hafezi; editing by Grant McCool)

Trump says to address trade, immigration in State of the Union speech

U.S. President Donald Trump speaks while participating in the swearing-in ceremony for the Secretary of the Department of Health and Human Services (HHS) Alex Azar at the White House in Washington, U.S., January 29, 2018.

WASHINGTON (Reuters) – President Donald Trump said on Monday he will address his proposed immigration overhaul in his State of the Union speech on Tuesday and will seek Democratic support for it.

Speaking to reporters after a swearing-in ceremony for new Health and Human Services Secretary Alex Azar, Trump said his immigration overhaul will have to be bipartisan “because the Republicans don’t really have the votes to get it done in any other way.”

Trump also said his speech will cover his efforts to lower trade barriers around the world for American exports. “We have to have reciprocal trade. It’s not a one-way deal anymore,” he said.

(Reporting By Steve HollandEditing by Chizu Nomiyama)

Attorney General Sessions sets up Hezbollah investigation team

U.S. Attorney General Jeff Sessions listens as U.S. President Donald Trump holds a cabinet meeting at the White House in Washington, U.S., January 10, 2018.

WASHINGTON (Reuters) – The U.S. Justice Department has set up a team to investigate individuals and organizations providing support to Hezbollah, the Iran-backed Islamist group in Lebanon that the U.S. has branded a terrorist organization, Attorney General Jeff Sessions said on Thursday.

Republicans have criticized former President Barack Obama following a December Politico report that the Obama administration hindered a Drug Enforcement Administration program targeting Hezbollah’s trafficking operations during its negotiation of the 2015 Iran nuclear deal.

Republican President Donald Trump says Obama gave away too much to Iran to secure the agreement, which gives Iran relief from sanctions in exchange for curbs on its nuclear program.

Sessions said the Justice Department will assemble leading investigators and prosecutors for the Hezbollah Financing and Narcoterrorism Team to ensure all investigations under the DEA program, called Project Cassandra, will be completed.

“The Justice Department will leave no stone unturned in order to eliminate threats to our citizens from terrorist organizations and to stem the tide of the devastating drug crisis,” Sessions said.

(Reporting by Blake Brittain; Editing by Mohammad Zargham and Bernadette Baum)

Iran says it might reconsider cooperation with U.N. nuclear watchdog

Head of Iran's Atomic Energy Organization Ali-Akbar Salehi attends the opening of the International Atomic Energy Agency (IAEA) General Conference at their headquarters in Vienna, Austria September 18, 2017.

By Bozorgmehr Sharafedin

LONDON (Reuters) – Iran said on Monday it might reconsider its cooperation with the U.N. nuclear watchdog if the United States failed to respect its commitments in the nuclear deal Tehran struck with world powers in 2015.

U.S. President Donald Trump must decide by mid-January whether to continue waiving U.S. sanctions on Iran’s oil exports under the terms of the nuclear pact that eased economic pressure on Tehran in exchange for limits on its nuclear program.

In October, Trump refused to certify that Iran was complying with the deal, also known by its acronym JCPOA, even though the International Atomic Energy Agency (IAEA) said it was.

“If the United States does not meet its commitment in the JCPOA, the Islamic Republic of Iran would take decisions that might affect its current cooperation with the International Atomic Energy Agency (IAEA),” Iran’s nuclear chief, Ali Akbar Salehi, was quoted as telling IAEA Director General Yukiya Amano in a phone call.

The IAEA is an international organization that seeks to promote the peaceful use of nuclear energy, and is scrutinizing Iran’s compliance with the agreement.

Supporters of the deal insist that strong international monitoring will prevent Iran from developing nuclear bombs. Iran has denied that it is seeking nuclear weapons.

Iranian foreign ministry spokesman Bahram Qasemi said on Monday that Tehran “would not prejudge the decision that America would take on January 13,” but said it was ready for all possible outcomes and “all options were on the table”.

Deputy foreign minister Abbas Araghchi said world powers should be ready for a possible U.S. withdrawal from the deal.

“The international community might come to this conclusion that the United States will withdraw from the JCPOA in the next few days,” Araghchi was quoted as saying by the state news agency IRNA.

“The international community must be ready for this development,” Araghchi added, warning that such a decision would affect stability in the region.

Trump is weighing whether the pact serves U.S. security interests, while the other world powers that negotiated it – France, Germany, Britain, Russia and China – still strongly support it.

U.S. Defense Secretary Jim Mattis said in September that the United States should consider staying in the Iran deal unless it were proven that Tehran was not abiding by the agreement or that it was not in the U.S. national interest to do so.

(Reporting by Bozorgmehr Sharafedin; Editing by Robin Pomeroy, William Maclean)

Trump signs tax, government spending bills into law

U.S. President Donald Trump sits at his desk before signing tax overhaul legislation in the Oval Office of the White House in Washington, U.S., December 22, 2017.

By Susan Heavey and Lisa Lambert

WASHINGTON (Reuters) – U.S. President Donald Trump signed Republicans’ massive $1.5 trillion tax overhaul into law on Friday, cementing the biggest legislative victory of his first year in office, and also approved a short-term spending bill that averts a possible government shutdown.

Trump said he wanted to sign the tax bill before leaving Washington on Friday for his Mar-a-Lago estate in Florida, rather than stage a more formal ceremony in January, so he could keep his promise to finish work before Christmas.

“I didn’t want you folks to say I wasn’t keeping my promise. I’m keeping my promise,” he told reporters in the White House.

The two pieces of legislation represent Trump’s most significant accomplishment with Congress since taking office in January, as well as a sign of what awaits when he returns from Florida after the Christmas holiday.

The tax package, the largest such overhaul since the 1980s, slashes the corporate rate from 35 percent to 21 percent and temporarily reduces the tax burden for most individuals as well.

Trump praised several companies that have announced employee bonuses in the wake of the bill’s passage, naming AT&T, Boeing, Wells Fargo, Comcast and Sinclair Broadcast Group.

“Corporations are literally going wild over this,” he said.

Democrats had opposed the bill as a giveaway to the wealthy that would add $1.5 trillion to the $20 trillion national debt during the next decade.

The spending bill extends federal funding through Jan. 19, largely at current levels. It does nothing to resolve broader disputes over immigration, healthcare and military spending.

Republicans also are divided over whether to follow up their sweeping overhaul of the U.S. tax code with a dramatic restructuring of federal benefit programs.

House Speaker Paul Ryan has said he would like to revamp welfare and health programs but Senate Republican Leader Mitch McConnell told National Public Radio on Monday that he was not interested in cutting those programs without Democratic support.

Trump’s year also closes with significant turnover of many top staffers who had been in the White House since early in his term. On Friday, the White House confirmed Deputy Chief of Staff Rick Dearborn and Jeremy Katz, who worked under White House economic adviser Gary Cohn, were leaving.

(Additional reporting by Makini Brice; Writing by Andy Sullivan; Editing by Bill Trott)

Trump Cabinet officials to visit Puerto Rico to assess recovery

Trump Cabinet officials to visit Puerto Rico to assess recovery

By Roberta Rampton

WASHINGTON (Reuters) – Two members of President Donald Trump’s Cabinet are set to visit Puerto Rico on Tuesday to assess the U.S. territory’s rebuilding in the three months since Hurricane Maria devastated homes, businesses and the power grid.

Homeland Security Secretary Kirstjen Nielsen and Housing and Urban Development Secretary Ben Carson will travel to Puerto Rico, where about a third of the island’s 3.4 million residents are still without power, hundreds remain in shelters, and thousands have fled to the U.S. mainland.

The visit comes as Republicans in the U.S. House of Representatives on Monday were planning to unveil a disaster aid package totaling $81 billion, according to a senior congressional aide. Some of that aid would go to Puerto Rico, but also to states like Texas and Florida that were hit by other hurricanes and to California, which is grappling with wild fires.

Even before Maria savaged Puerto Rico, the island was contending with $72 billion in debt. Puerto Rican Governor Ricardo Rossello has asked the federal government for a total of $94.4 billion in aid, including $31.1 billion for housing and $17.8 billion to rebuild its ruined power grid.

The Federal Emergency Management Agency (FEMA) has so far approved more than $660 million in aid for individuals in Puerto Rico as well as more than $450 million in public assistance.

Nielsen and Carson will receive detailed briefings on rebuilding efforts and see how federal aid is helping residents to recover, a DHS official said.

Nielsen, who oversees FEMA, and Rossello are slated to hold a news conference.

The visit comes as Congress prepares to vote on a tax overhaul bill that Puerto Rican officials have said they fear will hurt the commonwealth’s pharmaceutical manufacturing sector – the cornerstone of the island’s economy – at a time when Puerto Rico can least afford to lose jobs and tax revenue.

Puerto Rico’s government has said 64 people died because of the hurricane, but after multiple media estimates of dramatically higher figures, Rossello on Monday ordered an official review of the death toll.

(Reporting by Roberta Rampton; Editing by Leslie Adler)