China takes a significant step by easing some tariffs on American agricultural products, yet soybeans remain a pricey affair. In an announcement on Wednesday, Chinese officials confirmed they would temporarily halt retaliatory tariffs on various US imports, which includes reducing duties on certain agricultural items. However, a key point to note—soybean imports from the US will still incur a hefty 13 percent tariff.
As per the State Council's tariff commission, starting from November 10, certain tariffs that soared up to 15 percent on selected US agricultural produce will be lifted, but the 10 percent tariffs, which were instituted in reaction to President Trump's so-called "Liberation Day" duties, will still be in place.
The meeting between President Trump and Chinese President Xi Jinping last week brought a breeze of relief to investors on both sides of the Pacific. This encounter alleviated concerns that the two largest economies might be veering away from negotiations designed to mend the ongoing tariff conflicts that have thrown global supply chains into disarray.
While the White House was quick to share their perspective on the outcomes of the meeting, the specifics from the Chinese side regarding what was agreed upon weren't as forthcoming.
Even Rogers Pay, a director at Trivium China in Beijing, remarked, "In general, this is a very positive development indicating that both parties are swiftly advancing towards implementing the agreement. This suggests mutual alignment, which bodes well for the stability of the deal."
However, the reduced tariffs still mean that Chinese stakeholders purchasing US soybeans will grapple with the ongoing 13 percent tariff, leading traders to assert that the cost makes US soybeans far less appealing in comparison to Brazilian options.
One trader from an international firm expressed skepticism about any resurgence in demand from China towards the US market in light of this tariff adjustment, stating, "Brazilian soy is simply more cost-effective than US products right now, and it's worth noting that even buyers outside of China are opting for Brazilian shipments."
Following the Xi-Trump discussions, the White House announced that China would commit to acquiring a minimum of 12 million metric tons of US soybeans within the last two months of 2025, along with a pledge to purchase at least 25 million tons annually for the subsequent three years. However, until now, these figures remain unverified by Beijing, and traders are closely monitoring for authentic indicators of substantial purchases.
The Brazilian alternative remains compelling. Recently, Chinese importers acquired 20 shipments of competitively priced Brazilian soybeans, as South American rates dropped in anticipation of potential resumption of US soybean sales to China, the leading global soybean importer. Current quotations for Brazilian soybeans slated for December shipment hover between $2.25 to $2.30 over the January 2026 soybean futures on the Chicago Board of Trade, in contrast to $2.40 per bushel for US beans scheduled to depart from the Gulf Coast, according to trader reports.
Before the notable meeting between Mr. Trump and Mr. Xi, the state-owned China Oil and Foodstuffs Corporation secured its debut purchases from this year's US harvest, a gesture interpretable as a sign of goodwill amidst the prevailing trade tensions.
In 2024, statistics indicated that China procured approximately 20 percent of its soybeans from the US, a decline from the 41 percent it bought in 2016—prior to the onset of Trump's presidential term, according to customs documentation.
This year, high tariffs have compelled China to largely overlook US agricultural outputs from its autumn harvest, resulting in American farmers losing billions of dollars in export opportunities. Moreover, China’s cabinet announced it would also temporarily suspend the 24 percent extra tariffs imposed on US goods since April for a duration of one year. What do you think about this evolving landscape? Are you in favor of easing tariffs to benefit farmers, or do you believe such reductions might endanger national interests? Share your thoughts in the comments below!
Source: Reuters
