Agencies
China’s soybean imports – which became deeply ingrained in the US-China trade war during Donald Trump’s first presidential term – hit a record high of 105 million tonnes in 2024, according to customs data released on Monday.
But most of that supply did not come from the US. And with US president-elect Trump sticking to his guns by calling for higher across-the-board tariffs after being sworn in next week, industry insiders and analysts are wondering what might become of their soybean trade.
Will China opt to rely even more on South American countries such as Brazil, and perhaps impose retaliatory tariffs on US soybean imports, or could China once again vow to increase its soybean purchases from US farmers to reach a new trade agreement? "Soybeans are a crucial trade product between China and the US, highlighting how interdependent the two countries are,” said Zhang Xiaoping, Greater China director for the US Soybean Export Council, an agricultural lobby group.
"As one of the US’ top exports, its soybeans are known for their high quality and steady supply, while China’s demand remains strong. This makes the soybean trade vital for both governments.”
Even though a full-year breakdown of China’s soybean trade data was not immediately provided, January-November data showed that Brazilian exporters held a nearly 74 per cent share, or 71.7 million tonnes.
In comparison, the US share dropped to a years-low 18.4 per cent, while the volume also dropped to 17.8 million tonnes from 19.6 million tonnes during the same 11-month period in 2023.Zhang’s view was echoed by Nick Marro, lead analyst for global trade at the Economist Intelligence Unit (EIU), who pointed out that the agricultural sector is vitally important in the US, and that Trump may not want to undermine his supporters’ interests.
"The US is such an important global agricultural exporter, meaning that its farm lobbies and farm exporters are disproportionally exposed to retaliation,” Marro said.
China is the world’s largest consumer of soybeans, and US soybeans filled 34.4 per cent of that demand in 2017.But when the US-China trade war began in 2018, China, as a means of retaliation against US punitive tariffs, slapped a 25 per cent additional tariff on American agricultural products, including soybeans. US import volume dropped sharply by 49.3 per cent to 16.6 million tonnes, or 18.9 per cent of China’s total soybean imports.
Trump and President Xi Jinping agreed to a tariff ceasefire at a G20 summit in December 2018, and that month China resumed purchasing US soybeans.The trade situation remained rocky over the following months, but by September 2019 the situation had improved to the point that China said it would exclude US soybeans, pork and other farm goods from additional trade war tariffs.
And in January 2020, Beijing and Washington signed the phase-one trade deal. Chinese authorities agreed to buy more American goods, and soybeans were among the key agricultural products named.
That year, China’s soybean purchases from the US jumped by 52.7 per cent to 25.9 million tonnes, accounting for 25.9 per cent of China’s import total.But the import volume of US soybeans has been dropping since 2021, with Brazil becoming an increasingly important source for China.
Beyond diversifying soybean-import sources, Chinese authorities have emphasised the need to enhance domestic soybean self-reliance.
During his recent visit to Heilongjiang, China’s largest soybean-producing province, agricultural minister Han Jun stressed the importance of increasing soybean yield per unit while maintaining stable production areas.
In January 2022, US President Joe Biden declined to lift tariffs on Chinese imports because Beijing had not abided by the terms of the phase-one deal, and the trade war persisted under Biden’s presidency.