US farmers need 'bigger,' 'more powerful' tractors after phase one China deal, Trump says
President Trump said U.S. farmers are going to have a hard time keeping up with the incoming demand that he believes will result from the newly struck “phase one” trade deal with China.
In order to keep up with production needs, farmers are going to buy more land and equipment, he claimed.
“There will be more tractors sold, they’re going to be bigger and better and more powerful and they’re going to be made by John Deere and Case [IH] and Caterpillar,” Trump said during a rally in Lake Charles, Louisiana on Friday.
According to the terms of the partial deal, China has agreed to purchase between $40 billion and $50 billion worth of U.S. agricultural products.
“I don’t think our farmers can produce that much,” Trump joked.
The president said the highest amount of agricultural products Beijing ever purchased from the U.S. in a year was $16 billion.
The deal is also expected to benefit the energy, banking and technology sectors.
Alongside the phase one deal, the U.S. and China agreed to a “trade pause,” meaning the U.S. will not raise tariffs on goods from China as scheduled next week. Rates were expected to increase to 30 percent.
It is unclear what the U.S. will give up as part of the phase one deal. Trump said on Friday the terms will be written up over the course of three to five weeks. Phase two negotiations are expected to begin immediately after the first piece is signed.
Trump seemed optimistic about the negotiations that took place this week, saying in a tweet on Friday that “good things” were happening amid “warmer feelings,” alleging that everyone would like to see “something significant happen.”
News of the partial agreement and the trade pause sent stocks higher during the trading day on Friday.