China, US discuss plans for trade talks

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Chinese state run firms have bought more than 500,000 tonnes of U.S. soybeans, according to two USA traders cited by Reuters.

U.S. Treasury yields advanced in tandem with Wall Street's gains after U.S. President Donald Trump said trade talks with China were progressing with discussions under way by telephone and more meetings likely among officials of both countries.

One U.S. trader with direct knowledge of the deals said Chinese state-owned firms bought at least 12 cargoes for shipment from January to March.

Officials at the White House and OMB did not immediately respond to requests for comment. With those exports gone, soybean prices had tumbled to their lowest in a decade, heaping pain on US farmers, a key Trump constituency.

On Tuesday morning Beijing time, top trade officials from the United States and China spoke telephonically, an indication that the discussion between the two countries is ongoing, despite the tension caused by the Huawei issue.

In July, China boosted the tariff on American-made cars as part of retaliatory measures against the U.S. Following a summit on trade in Buenos Aires earlier this month, Trump jolted global auto stocks by tweeting that China agreed to "reduce and remove" tariffs on imported U.S. models, something China did not confirm at the time.

The tariff reduction benefits Daimler and BMW more than US automakers such as GM or Ford Motor Co. because the German luxury brands dominate the top 10 list of vehicle imports into China.

Most of the major auto manufacturers in the U.S. are unaware of the lower tariff rule on imported cars to China.

USA farmers welcomed the deals.

The dispute has prompted the USA and China to impose new tariffs on billions of dollars worth of annual trade this year, measures that have contributed to economic worries in both countries.

The lack of sales has left U.S. farmers in a rough spot.

The 25 percent tariff on US soybeans Beijing imposed on July 6 remains in effect.

Auto sales in the world's second-biggest economy declined for a sixth consecutive month in November, bringing the market closer to its first annual drop in at least two decades. Brazil will start harvesting its next crop in early 2019 - leaving a window for the U.S.to sell.

"Sentiment is driven by positive news that there might be progress with U.S. and China negotiations - which, I think, will be the number 1 headline for the next three months", said Tom Plumb, president of Plumb Funds in Madison, Wisconsin. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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