The Chinese government has ordered state-owned firms to cease purchases of soybeans and pork from the United States in retaliation for a decision by U.S. leadership regarding Hong Kong. Despite the order, several purchases of American soybeans were made by Chinese firms.

The decision by Chinese Authorities is in response to a recent move by President Donald Trump to roll back special treatments for Hong Kong, which included eliminating extradition protocols and export controls. The step by the President is in retaliation to China's own decision to impose new security legislation in Hong Kong.

"China has asked main state firms to suspend large scale purchases of major U.S. farm products like soybeans and pork, in response to U.S. reaction to Hong Kong," said an anonymous source familiar with the matter. "Now we will watch and see what the U.S. does next."

In addition to halting imports of soy and pork, China has also halted large purchases of corn and cotton. Since the order was issued, Chinese importers have cancelled between 10,000 and 20,000 tons of pork shipments.

The order poses to threaten the "phase one" trade deal signed in January, where China agreed to buy $32 billion of American agricultural goods. Whether or not the Chinese government is considering scrapping the January trade agreement is currently uncertain, but it remains a possibility. The Chinese government has thus far been content to engage in President Trump's "tit-for-tat" strategy of standing off against the Asian superpower; if China is willing to match Trump's "tit" with a "tat" of halted imports, it is very likely that the termination of the trade deal is not off the table.

Despite the order and the apparent hardline stance of the Chinese government, however, Chinese firms still went through with purchasing several loads of American soy. The purchases, totaling just under 200,000 tons, were originally to be shipped late last year during peak harvest season when soy crop is the cheapest. It is not currently known why the purchases were made, and if they were at all authorized by the Chinese government.