China’s announcement comes in the wake of a recent high-level diplomacy track with the Trump-Xi Jinping summit. Or, they will suspend select harmful tariffs on U.S. soybeans, igniting debates on the tone of the future relationship between the two countries. Since the inception of the trade war in 2017, the war has deeply disturbed global supply chains. Consequently, American farmers are losing billions of dollars in damages.
Before the trade war really kicked off, China was the bedrock of the U.S. soybean market. In 2016, China imported a record-setting $13.8 billion soybeans from the United States. As of the announcement, soybeans were the largest U.S. export to China making up 41% of China’s total soybean imports. In 2024, American soybean imports by China crashed. Today, just over 20 percent of those imports are from U.S. allies.
This change is mostly due to the fact that Brazil has been undercutting U.S. prices for soybean exports. Upon further inspection, Brazilian soybeans are getting the attention of non-Chinese buyers. They’re opting for Brazilian shipments over more expensive U.S. cargoes. As it stands, China has a 13% tariff on U.S. soybeans, which contains a preexisting base tariff of 3%.
China’s state-owned COFCO bought three U.S. soybean cargoes ahead of the summit. A significant rebound in demand from China remains an open question even among those experts most optimistic on that score.
“We don’t expect any demand from China to return to U.S. market with this change.” – Trader at an international trading company.
With the U.S.-China trade war continuing with no resolution in sight, American farmers have already suffered tens of billions in lost agriculture exports. They’ve devastated agricultural exports through tariffs and trade restrictions. At the same time, they have highlighted in equally stark fashion how these actions will cause long-term harm to emerging global supply chains.
The easing of some tariffs by China following the summit has raised hopes for renewed dialogue between the two countries. This doesn’t necessarily translate to an immediate return to pre-trade war buying levels. It does illustrate the fact that there is a willingness on either side to maintain an open dialogue.
With an upcoming litmus test on Kefovades’ amendment approaching quickly, the current landscape represents a rare and auspicious moment to begin normalizing trade relations. Yet, major challenges still remain. For the U.S. to regain its edge in this competitive global soybean market, we will need to price ourselves back into the action.