China's trade tensions with US may harm soybean industry Experts Warn

According to its article, Business Insider unveils that as tensions between the US and China continue to escalate, concerns are rising about the potential impact on the agricultural industry, particularly US soybean farmers. 

In 2024, China imported a record-breaking 105.03 million metric tons of soybeans, a crucial crop that became a focal point during Donald Trump's trade war with China in his first presidency.

China's imports of US soybeans saw a significant rise last year, increasing by 6.5 per cent from 2023, according to Reuters' analysis of official customs data. Analysts believe that China, the world's largest soybean consumer, was likely preparing for potential geopolitical risks ahead of Trump’s second term.

Trump has threatened to impose 60 per cent tariffs on all Chinese goods if re-elected, stoking concerns about a further escalation in trade conflicts.

"If the US ramps up tariffs on Chinese imports, China could target US agricultural imports as retaliatory tariff countermeasures," said Rajiv Biswas, an international economist and author of "Asian Megatrends," in an interview with Business Insider.

"US soybean imports are likely to be a key target for China's retaliatory tariff measures due to the very large scale of China's soybean imports from the US," he added. The US, the second-largest soybean producer in the world after Brazil, supplies about a quarter of China’s soybean imports, which are primarily used for animal feed.

During his first term, Trump imposed significant tariffs on Chinese imports. In retaliation, China placed 25 per cent tariffs on US agricultural products, including soybeans, causing a dramatic decline in American soybean exports to China.

However, some of these tariffs on farm imports were lifted ahead of the US-China trade deal in January 2020.

A replay of retaliatory tariffs during Trump's second presidency could have a severe impact on US soybean farmers. "In a scenario where China imposes retaliatory tariffs on US soybeans in 2025, the impact would again likely be a substantial economic loss for the US soybean industry," said Biswas.

A study by the American Soybean Association and the National Corn Growers Association reveals that a renewed trade war would lead to an "immediate drop in corn and soy exports to the tune of hundreds of millions of tons."

"Brazil and Argentina would claim the lost market share, which would be extremely difficult for American growers to reclaim in the future," the associations warned in October, urging against a trade war. They also pointed out that there isn't enough global demand to make up for a significant loss of soybean exports to China.

The two agriculture trade associations also emphasized that a trade war would have a "ripple impact across the US, particularly in rural economies where farmers live, purchase inputs, use farm and personal services, and purchase household goods."

Since Trump's first term, Chinese soybean importers have diversified their sources, with Brazil being a major beneficiary of this trend.

By Naila Huseynova