A trade deal between the US and China announced on Friday will help ease diplomatic tension between the two superpowers but it could pose some problems for Australian gas and beef exporters.
The White House announced a 10-point agreement on Friday which will allow the US to start exporting LNG and beef to China and open up the Chinese market to US ratings agencies and credit card companies. In exchange the US has promised to look favourably on Chinese foreign investment.
“US-China relationships are now hitting a new high especially in trade,” Commerce Secretary Wilbur Ross said in unveiling the package at the White House.
The move is seen as an “early harvest” of the warming of relations between the two countries since President Donald Trump met Chinese leader Xi Jinping over chocolate cake at his Mar-a-Lago resort last month. Mr Trump has hailed Mr Xi’s help in dealing with North Korea and dropped his election pledge to label China a currency manipulator.
The US could compete with Australia in selling LNG to China but only in the longer term.
The US could compete with Australia in selling LNG to China but only in the longer term. Bloomberg
But the deal raises questions for Australia. Saul Kavonic, at consultancy Wood Mackenzie, said the US-China trade agreement could add to the downward pressure on LNG export prices to China when existing contracts come up for renegotiation.