WASHINGTON, D.C., U.S. — The United States and China signed the first phase of its trade agreement on Jan. 15 that includes a commitment by China that it will make additional purchases of U.S. goods and services in the coming years.

The agreement brings an end to an ongoing trade war between the two countries by implementing and enforcing phase one of the deal. The United States and China have been in an ongoing trade dispute since China raised import tariffs by 25% on U.S. soybeans in July 2018 in retaliation for U.S. duties on Chinese goods.

“This agreement is proof President Trump’s negotiating strategy is working,” said Sonny Perdue, U.S. Secretary of Agriculture. “While it took China a long time to realize President Trump was serious, this China phase one deal is a huge success for the entire economy. This agreement finally levels the playing field for U.S. agriculture and will be a bonanza for America’s farmers, ranchers and producers. China has not played by the rules for too long, and I thank President Trump for standing up to their unfair trading practices and for putting America first. We look forward to exporting to Chinese customers hungry for American products.”

The agriculture section of the trade agreement addresses structural barriers to trade and will support an expansion of U.S. food, agriculture and seafood product exports, increasing U.S. farm and fishery income.

Multiple non-tariff barriers to U.S. agriculture and seafood products are addressed, including for meat, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food, and products of agriculture biotechnology.

In the next two years, China will purchase between $40 billion and $50 billion of U.S. agricultural goods each year.

The U.S. ag industry expressed support and looks forward to opening markets that were previously closed.

According to the American Feed Industry Association (AFIA), the U.S. animal food manufacturing industry faced restrictions of any new U.S. feed additive and premix products to be exported to China since 2011 and restrictions of U.S. feed products with ruminant-origin ingredients and a number of poultry-derived ingredients.

However, the AFIA said the new deal with China addresses these constraints with a facility registration process for feed additives, premixes and compound feed, as well as lifting the poultry and ruminant ban for animal food products.

“Addressing the non-tariff barriers that challenge our industry in the Chinese market has been a top priority for AFIA for nearly a decade,” said Constance Cullman, chief executive officer (CEO) of the AFIA. “I am very excited about what this agreement means for the U.S. animal food industry and reopening the Chinese market for our products. I’m grateful for the hard work and enduring efforts of our trade negotiators on our behalf and the administration as a whole for defending the enhancement of productive trading relationships and supporting U.S. businesses and exports.”

The National Association of Wheat Growers (NAWG) and the U.S. Wheat Associates (USW) are hopeful the deal will restore China’s demand for U.S. wheat.

“Even though China has huge domestic wheat stocks, they were buying more U.S. wheat because they needed it to meet growing demand for higher quality wheat foods,” said Vince Peterson, president of USW. “The losses we demonstrated soon after China stopped importing U.S. wheat have only grown since then, so we hope the agreement signed today signals a potential turn-around.”

With the new agreement the National Sorghum Producers (NSP) is looking forward to a more stable, competitive market.

“National Sorghum Producers was pleased to be a part of the signing today of a phase one deal with China and applauds both the U.S. and Chinese administrations for their hard work to progress negotiations and reach an agreement that should lessen market uncertainty and shift purchases to more U.S. agriculture products, like sorghum, by our customers in China,” said Dan Atkisson, chairman of the NSP. “Our farmers, as well as Chinese consumers, will benefit from this agreement. We anticipate fully analyzing the terms of the deal, but as for what we understand today, it offers more opportunities for our growers to once again become competitive in the Chinese market and to regain relationships with our customers there. We know we have the sorghum to sell, and we know our customers in China want our product. Therefore, we look forward to re-establishing business at the shipment levels we saw before this process began.”

The U.S. Grains Council (USGC) supports the signing and is encouraged by the short-term and long-term opportunities it can provide.

“The U.S. Grains Council is pleased to see the signing today of a phase one deal with China, which should reduce continued market uncertainty and incentivize China to purchase significant amounts of the full range of U.S. agricultural products, including grains, distiller’s dried grains with solubles (DDGS) and ethanol, to total at least $80 billion over the next two years,” said Darren Armstrong, chairman of the USGC. “The structural reforms, particularly those affecting feed grains, agricultural biotechnology, and sanitary and phytosanitary measures — once fully committed and implemented — will hopefully offer lasting impacts beyond short-term commitments to make accelerated, market-driven purchases. The agreement, as we understand it, will offer opportunities for U.S. farmers to once again become competitive in China and serve our customers by addressing retaliatory tariffs and long-standing, non-tariff barriers to trade.”

The National Grain and Feed Association (NGFA) commended phase one of the deal that is working to end the ongoing trade issues between the United States and China.

“It represents a significant first step in resolving disruptions and long-standing, festering impediments involving trade between the world’s two largest economies, and contains substantial commitments from China to purchase U.S. food, agricultural and seafood products,” said Eric Wilkey, chairman of the NGFA. “It also is significant that the agreement contains Chinese commitments to abide by science- and risk-based processes with transparency and specific timelines for regulatory actions related to agricultural biotechnology, animal food, and meat and poultry products.”

Despite its support of the U.S.-China trade deal signing, the NGFA said there is a need for more negotiations in the future.

“NGFA believes more negotiations need to occur to resolve particularly non-tariff barriers to trade, including sanitary and phytosanitary issues, affecting grain and grain products, that too frequently and unpredictably disrupt U.S. agricultural trade with China,” Wilkey said. “NGFA also seeks to restore competitive open market agricultural trade and a level playing field with China. NGFA appreciates the administration’s recognition of these issues and will be encouraging that they be addressed in phase two negotiations with China. NGFA hopes those discussions will begin soon to build on the momentum and progress established in the phase one agreement.”