Key Points
- China promised to buy at least 25 million metric tons of U.S. soybeans annually for three years and remove retaliatory tariffs on American farm products.
- Farmers welcome the news but caution that it won’t solve immediate problems like high input costs or fully restore pre-trade war volumes.
- China had significantly shifted soybean purchases to South America since the initial trade war, with Brazil becoming its primary supplier.
- Farmers are cautiously optimistic, emphasizing the importance of China following through on its promises for a stable, long-term trade relationship.
American farmers welcomed China’s pledge to buy some of their soybeans, but they warned this won’t solve all their financial troubles. They are still dealing with incredibly high prices for fertilizer, tractors, repair parts, and seeds.
China promised to buy at least 25 million metric tons of soybeans annually for the next three years. This would bring their purchases back to levels seen before President Donald Trump started his trade war with China in the spring. However, the 12 million metric tons China plans to buy between now and January is only about half of their usual yearly volume.
“This is a very good thing. I’m very grateful,” said Iowa farmer Robb Ewoldt, who serves as a director with the United Soybean Board. “I don’t want to sound like an ungrateful farmer, but it doesn’t cure everything in the short term.”
Agriculture Secretary Brooke Rollins announced that China also agreed to remove all its extra tariffs on American farm products. This should open the door for sales of other crops and beef. Plus, China promised to resume buying U.S. sorghum, another crop mostly used for animal feed that relies heavily on the Chinese market. More than half of both the sorghum and soybean crops are exported each year, with much of that going to China.
These promises from China should make it easier for farmers to secure the loans they need for next year. But Ewoldt cautioned, “I hope the administration doesn’t think that this solves everything in the next 6 to 8 months or ten months.”
Trump had promised a major aid package for farmers this fall to help them through the trade war with China, but it’s on hold due to the ongoing government shutdown. Rollins confirmed that the aid package is still in the works, and she assured that the administration is ready to “step in the gap” and address any harm the trade war has caused farmers.
“We’ll see what the market does and we will be ready to continue to step in if, in fact, we believe it’s necessary,” Rollins said.
China is the world’s biggest buyer of soybeans, historically purchasing about a quarter of the American crop. Last year, China bought over $12.5 billion worth of the nearly $24.5 billion in U.S. soybeans exported.
China stopped buying American soybeans this year after Trump imposed tariffs. However, it had been steadily shifting more of its purchases to Brazil and other South American nations since Trump’s initial trade war in his first term. Last year, Brazilian beans made up over 70% of China’s imports, while the U.S. share dropped to 21%, according to World Bank data. Argentina and other South American countries are also selling more to China, as China diversifies to improve its food security.
Farmer Caleb Ragland, president of the American Soybean Association, said this agreement sets the stage for China to resume its traditional purchases of 25 million to 30 million metric tons of American soybeans.
“This is a meaningful step forward to reestablishing a stable, long-term trading relationship that delivers results for farm families and future generations,” said Ragland, who farms near Magnolia, Kentucky.
Indiana farmer Brent Bible said this deal with China sounds promising, if they actually follow through, unlike what happened with the 2020 trade agreement signed after Trump’s initial trade war. The COVID-19 pandemic disrupted trade just as that agreement started. In 2022, U.S. farm exports to China hit a record but then fell.
“If we see actionable purchases and follow through by China, then it’s great,” Bible said.
