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China Fulfills Initial U.S. Soybean Commitment Amid Shifting Trade Policies
China has met its initial commitment to purchase 12 million metric tons of soybeans from the United States, marking a significant milestone in the trade agreement announced last October. However, agricultural experts express concern about the sustainability of this agreement amid President Donald Trump’s rapidly changing trade policies.
Treasury Secretary Scott Bessent confirmed the purchasing milestone during an interview with Maria Bartiromo on Fox Business from the World Economic Forum in Davos. After meeting with Chinese Vice President He Lifeng, Bessent reported that China remains committed to the agreement.
“He told me that just this week they completed their soybean purchases, and we’re looking forward to next year’s 25 million tons,” Bessent said. “They did everything they said they were going to do.”
The agreement, which calls for China to purchase 25 million metric tons of American soybeans annually for the next three years, followed a period of tension when Beijing halted all U.S. soybean purchases during the height of the trade war. The resumption of purchases came after Trump and Chinese President Xi Jinping agreed to a truce during their meeting in South Korea.
Despite this positive development, Iowa State University agricultural economist Chad Hart warns that recent tariff threats could jeopardize the agreement’s future. Earlier this month, Trump proposed 25% tariffs on any country purchasing from Iran, which would include China. He subsequently threatened 10% tariffs on eight European allies over opposition to his Greenland acquisition efforts.
“Those new tariffs — what does that mean for this agreement? Does it throw it out? Is it still binding? That’s sort of the game here now,” Hart explained.
The uncertainty surrounding U.S. trade policy comes at a particularly challenging time for American farmers. While soybean prices briefly jumped to above $11.50 per bushel following the agreement’s announcement, they have since fallen to approximately $10.56 per bushel—a level insufficient to cover most farmers’ production costs.
Data from the Department of Agriculture initially raised doubts about China’s commitment to the agreement due to slow purchasing at the start. However, USDA figures now show that China had bought more than 8 million tons of U.S. soybeans by January 8, with several additional orders placed since then ranging from 132,000 to over 300,000 tons.
Market analysts note that China has significantly diversified its soybean supply chain in recent years. According to World Bank data, Brazilian beans accounted for more than 70% of China’s soybean imports last year, while the U.S. share declined to 21%. This strategic shift allows China to find the cheapest deals while reducing dependence on any single source.
To help farmers weather trade disruptions, the Trump administration plans to distribute approximately $12 billion in aid to U.S. agricultural producers. Under this program, soybean farmers will receive $30.88 per acre, corn farmers $44.36 per acre, and sorghum farmers $48.11 per acre—amounts determined by USDA formulas based on production costs.
However, farmers indicate this assistance won’t fully address their challenges as they continue to face soaring expenses for fertilizer, seeds, and labor. The combination of high production costs and market uncertainty is making farm management increasingly difficult.
Cory Walters, associate professor in the University of Nebraska-Lincoln’s Department of Agricultural Economics, highlights the compounding pressures on agricultural producers: “Everything is changing—the land rental market, the fertilizer market, the seed market—and it’s all pinching the farmer when they go to do their cash flows. The ability to make a decision is tougher now because of all the uncertainty in the market.”
As China meets its initial purchasing commitment, the agricultural sector watches closely to see whether the broader trade relationship can maintain stability amid volatile policy shifts and whether American farmers will ultimately benefit from the renewed trade flows.
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7 Comments
The soybean purchase milestone is a positive step, but the long-term outlook is uncertain with Trump’s volatile trade approach. Consistent, predictable policies are needed to support US farmers and maintain the China-US agricultural relationship.
This initial soybean purchase target being met is good news, but the bigger challenge will be sustaining the trade agreement over time. Consistency and clear communication from both sides are essential.
It’s good to see China meeting its initial soybean purchase commitment, but the broader US-China trade dynamic remains fragile. Trump’s shifting policies pose a constant threat to the stability of this important agricultural relationship.
The soybean purchase milestone is a positive step, but the long-term viability of the deal is in question given Trump’s mercurial trade approach. Consistent policies are needed to support American farmers and the agricultural economy.
China fulfilling its soybean purchase goal is a promising development, but the fragility of the trade deal is worrying. Trump’s shifting policies could easily disrupt this progress, which would impact farmers on both sides.
Interesting to see China meeting its initial soybean purchase commitment. However, the sustainability of this deal is concerning given the unpredictability of Trump’s trade policies. Maintaining stable agricultural trade will be crucial for both countries.
While the soybean purchase goal has been achieved, the broader US-China trade relationship remains fragile. Farmers on both sides need stability and predictability to plan their operations effectively.