Since Chinese orders shifted to South America, the share of U.S. soybeans imported from China has fallen from 34 percent to less than five percent, and stockpiles in 2024 have been sold out until next summer.
The gold-yellow soybeans filled the U.S. Midwest warehouses, and the bean farmers stared at the depreciated crops and the President of the American Soybean Association, Lagrange, sat on the tractor and issued an emergency call.
Even Trump was writing late at night to urge China to increase its procurement, and even spoke about hoping to double its procurement.
However, when the outside world believes that this “soy stagnation” will clamp up, The words of the Chinese Ministry of Commerce at a routine press conference suddenly broke the silence.
China can resume purchasing U.S. soybeans, but there is a “condition.”
Department of Commerce clear position
On September 25, China's Ministry of Commerce spokesman Huangdong gave a direct response to questions about Sino-US soybeans trade at a routine news conference.
"If the United States really wants to expand soybean trade, it must first cancel the relevant unreasonable tariffs." This statement is not temporary, but a continuation of China's consistent position in Sino-US economic and trade friction.
The basis of China-US economic and trade relations is mutual benefit. Since 2018, the United States has imposed tariffs on Chinese goods.
In order to safeguard its own rights and interests, China has had to take countermeasures on agricultural products such as U.S. soybeans and impose a 25% retaliatory tariff.
The tariffs directly resulted in a dramatic increase in the overall cost of U.S. soybeans entering the Chinese market, completely losing price competitiveness.
China's Ministry of Commerce has repeatedly stressed that the root cause of the normal cooperation between the two sides is the unilateral sanctions and tariff policy of the United States.
More importantly, China no longer needs to rely on a single supply source.
In recent years, China has accelerated the “dependence” process of soybean procurement, not only by importing large amounts from Brazil and Argentina, but also by promoting “soya reduction replacement” technology to directly reduce soybean use.
From 1st to 8th, the share of Brazilian soybeans in China's imports has exceeded 85%, and the share of Argentina, Uruguay and other countries has also continued to rise.
This arrangement has allowed China to react in full swing.It's not that China refuses to buy American soybeans, but that the tariff barriers built by the United States itself block the way.
The United States is not unaware of China's position. Previously, a delegation of political and business leaders in the Midwest of the United States met with Chinese trade negotiator Li Chenggang.
At the time, the outside world generally speculated that soybeans trade would be the core issue. However, the talks did not make concrete progress.
The Trump administration has tried to make China concessions through political pressure, but has ignored China’s long-established autonomy.
China has reduced or even suspended the purchase of American soybeans, and the impact on the United States is spreading from the agricultural field to the political level, forming an interlocking crisis chain.
Impact of trade shift
For American soybean farmers, this impact is fatal. The United States produces about 120 million tons of soybeans every year, of which nearly 40% depends on exports.
China has long accounted for about 60% of its exports, and in 2023 it bought half of the U.S. soybean exports.
For the 500,000 farmers across the U.S. who rely on soybean farming, China is not an ordinary customer, but a “customer that cannot be lost.”
Beginning in the second half of 2024, China's purchases have fallen by 60% year-on-year, and U.S. soybean stocks have rapidly accumulated. Chicago soybean futures prices fell to five-year lows, with soybean profits falling to $80 per acre from $150 in 2023.
Many farmers have calculated the account, the first half of the year has been completely wasted, some even lost their money, but the bank loan is not able to repay.
Nearly 2,000 farms filed for bankruptcy in 2018-2019, an increase of 30 percent.
More difficultly, about 40 percent of the core parts of U.S. farm machines depend on Chinese imports, and trade friction has led to a surge in maintenance costs, further squeezing the profit space for farmers.
Even if the U.S. government provides about $12 billion in agricultural subsidies in 2024, it will be far from making up for farmers' actual losses.
The University of Missouri estimates that net U.S. agricultural income may fall by more than $30 billion in 2026, and the Senate Agriculture Appropriations Committee has urgently called for a new round of aid package.
Economic pressures quickly turned into political pressures, with Midwestern agri-states which have always been the Republican’s iron box office, and farmers in those areas almost side by side supporting Trump at the 2020 general election.
Today, soybeans are delayed, income is sharply reduced, and many farmers have publicly expressed dissatisfaction. If this happens, I will never vote for the Republican Party again next year.”
Republican lawmakers rushed to call the White House for pressure, and North Dakota Republican senator John Howin said he needed $23 billion in aid.
The trouble of U.S. soybeans trade, which appears to be the market volatility triggered by the shift to procurement, actually exposes the core nature of the Sino-U.S. trade game.
This is a crackdown on the rules of the market on the political game and a conflict between supply chain security and unilateralism.
The US ignores market rules.
China has always insisted that soybean procurement is a market-oriented behavior, and that decisions are based on objective factors such as price, quality, and transport stability, rather than “political gifts”.
As an importer of 60% of the world's soybeans, although China's purchasing preference can affect the market flow, it has never used this "buyer's advantage" as a pressure tool.
Even in the most frictional 2024, 22.13 million tons of U.S. soybeans were still imported, accounting for 21 percent of total imports.
However, the United States uses soybeans as a geopolitical bargaining chip. The Trump administration not only asks China to increase its purchases to four times the original level, but also tries to replace market rules with political pressure.
China’s strategy is based on long-term considerations for supply chain security.
The soya war of 2003 made China deeply aware of the risks of a single supply source.
At the time, the U.S. Department of Agriculture triggered a surge in prices by adjusting inventory data, leading to heavy losses for Chinese press companies, most of which are held by foreign capital.
Since then, China has launched the restructuring of the global supply system. Form a pattern of "Brazil as the mainstay and multi-country supplement".
Now it has expanded to Russia's Far East base, organic soybeans in Uruguay, and new sources such as Tanzania and Mozambique in Africa.
The plight of the United States stems from the short-sightedness of its own policies.
In order to promote “America’s Priority,” the Trump administration cut 18% of agricultural technology subsidies, leading to delays in research and development such as soya varieties improvement and pest control.
At the same time, the abuse of chemical fertilizers has aggravated problems such as soil pollution and further weakened industrial competitiveness.
When China turned to the South American market, the United States tried to pressure Argentina and other countries to cut off China's supply, but it was ignored.
Argentine President Milei not only canceled the soybean export tax and settled in RMB, but also bluntly said that "China is more reliable than the United States."
Because China can deliver orders for real gold and silver, and the United States has nothing but pressure.
conclusion
In fact, the game around soybeans has long gone beyond the agricultural trade itself.
China's insistence on abolishing unreasonable tariffs is not a deliberate embarrassment, but a defense of fair trade rules.
The prerequisite for cooperation is mutual respect and sincerity, as the Chinese Ministry of Commerce has repeatedly stressed, the basis of the Sino-U.S. economic and trade relations is mutual benefit and win-win, and the return of U.S. soybeans to the Chinese market, the key is always in the hands of Washington.