U.S. soybean exports to China ground to a halt last month following Beijing’s 44-percent tariff on the legume, an effective ban imposed in May in retaliation for President Donald Trump’s import duties on Chinese goods.
Soybeans are expected to be among the key issues Trump will raise when he meets Chinese President Xi Jinping next week in South Korea. Trump told reporters earlier this month that any trade deal would depend on Beijing increasing its soybean purchases, suggesting that orders should “match or even exceed” pre-trade war levels.
Yet while Chinese soybean imports from the United States are likely to resume eventually, the once-dominant position of American farmers in the Chinese market “is likely a thing of the past,” according to a new report by the London-based consultancy Oxford Economics.
Why It Matters
As a soybean exporter, the United States ranks second only to Brazil and has long been the leading supplier to China—the world’s top importer—accounting for an average 28 percent of the Chinese market over the past seven years, according to the American Soybean Association.
Soybeans make up about 14 percent of total U.S. agricultural exports, making them America’s most valuable foodstuff sold abroad. The sector’s heavy reliance on Chinese buyers, however, has become an Achilles’ heel, one Beijing has been quick to exploit in pursuit of more favorable trade terms.
Newsweek reached out to the Department of Agriculture via email with a request for response.
What To Know
China is not expected to purchase American soybeans before the current export window closes around February, and the country is unlikely ever again to restore the pre-tariff market share once enjoyed by U.S. farmers, Oxford Economics said.
The shift comes as Beijing seeks to strengthen food security by diversifying its sources of soybeans, ramping up imports from Brazil and Argentina.
“China has been purchasing soybeans from South American producers at a rapid pace, with total imports for the first nine months of the year up 5.3 percent year on year,” wrote report author Kiran Ahmed, lead economist at the firm.
Further strengthening this trend, Argentina’s temporary suspension of an export tax on grains encouraged China to import as many as 30 cargoes as it stockpiled the resource, Ahmed said.
The move has reportedly alarmed U.S. officials, who fear the resulting price drop could make South American soybeans even more attractive to Beijing. “This gives China more leverage on us,” read a private message obtained by The Associated Press, apparently sent last month by Agriculture Secretary Brooke Rollins to Treasury Secretary Scott Bessent.
That leverage was made clear when China first slapped retaliatory tariffs on U.S. soybeans during the initial round of the trade war back in 2018.
“With the new round of President Trump’s trade war with China, and the continued imperative for China to ‘decouple,’ it is doubling down on that move—which actually makes complete strategic sense for it,” Evan Ellis, a research professor at the U.S. Army War College’s Strategic Studies Institute, told Newsweek.
“By shifting away from agricultural purchases from the U.S., it decreases its food vulnerability to an increasingly hostile rival and punishes its leader (Trump) by hurting one of his core constituencies,” Ellis said, adding that there was “almost no incentive” for China to reverse course from this "win-win situation" unless the U.S. offered something “very lucrative” in return.
What People Are Saying
Kush Desai, a White House spokesperson, told Newsweek: "President Trump pledged to stand up for American farmers, and the Administration continues to hold China accountable for its Phase One commitments to increase American agricultural imports."
Stefan Maupin, executive director of the Tennessee Soybean Promotion Council, told the Tennessee Lookout: “We’re in a significant and desperate situation where…none of the crops that farmers grow right now return a profit. They don’t even break even.”
Guo Jiakun, Chinese Foreign Ministry spokesperson, said during an October 20 press conference: "China’s position on the economic and trade issues between China and the U.S. is consistent and clear. Tariff and trade wars do not serve any party’s interest. The two sides need to address relevant issues through consultation on the basis of equality, respect and mutual benefit."
What Happens Next
Trump is expected to meet with Xi on the sidelines of the Asia-Pacific Economic Cooperation Forum in Seoul next week. Among other topics, the U.S. leader has said he plans to raise China’s tit-for-tat restrictions on rare earth exports and the production of precursors used in the deadly opioid fentanyl.
