A barge loaded with soybeans at the Cargill port in Santarem, Para state, Brazil. Photo / Dado Galdieri, Bloomberg, via The Washinton Post
The start of the harvest in September is usually when China, the world’s biggest importer of soybeans, puts in a flurry of orders to the United States farms of Illinois, Iowa, Minnesota and Indiana.
This year, however, Chinese importers aren’t buying.
In retaliation for US President Donald Trump’s tariffs, Beijing has cut off Midwestern farmers from their largest and most lucrative overseas customer: China accounted for half - or US$12.6 billion - of US soybean exports last year.
For the first time since November 2018, China imported no soybeans from the US in September, data from China’s General Administration of Customs showed yesterday.
“We’re in uncharted territory in terms of a complete absence of Chinese buyers for the harvest that is currently coming in,” said Even Pay, director of agriculture research at Trivium China, a research firm based in Beijing.
For Beijing, halting US soybean imports has been an easy and relatively cost-free way to pile pressure on Trump ahead of a planned meeting with Chinese President Xi Jinping in South Korea this month.
Trump, speaking to reporters on Air Force One on Monday said that he wanted China to return to its previous level of purchases and that he thought Beijing was ready to make a deal on soybeans.
But while American farmers lobby Trump to get them back into China, there isn’t similar pressure within China for the Government to allow purchases from US suppliers. That “gives Beijing a great deal of negotiating leverage”, Pay said.
Trump took to social media to call China’s decision to not buy US soybeans “an Economically Hostile Act” and said the US was considering “terminating” buying cooking oil from China as retribution.
Beijing has shrugged off Trump’s threats.
Analysts say it is ready to extend the purchasing freeze for the rest of the year.
Here’s how China has turned its massive market for soy into a trade war weapon.
China consumes far more soybeans than any other country in the world, but it grows less than a fifth of what it needs - just enough to cover all the tofu and soy sauce used in Chinese cooking.
It buys everything else from abroad - importing more than the rest of the world combined - and the US has traditionally been one of its top suppliers.
Those imported beans mostly feed huge numbers of pigs, chickens, and other livestock, as meat consumption by wealthier Chinese families has grown rapidly.
Despite efforts to develop alternatives, soybeans accounted for 13% of animal feed in 2023.
The remaining imported soybeans mostly become cooking oil: soybean oil’s mild taste and ability to withstand high heats make it perfect for stir-fries.
Chinese producers favour US or Brazilian imports over more expensive homegrown soybeans.
For US farmers, it’s hard to find a replacement for Chinese demand. “It’s just an enormous market,” said Phil Luck, director of the economics programme at the Centre for Strategic and International Studies, a Washington-based think tank.
China has worked hard to curb its reliance on US soy imports, especially after the trade conflict of Trump’s first term ended in 2020 when Beijing agreed to buy US$200 billion in American products, including soybeans although it bought far less than it promised.
Beijing has since pushed Chinese farms to consolidate and expand domestic output.
It has launched trial programmes for previously banned genetically modified crops.
And it is aiming to lower the ratio of soybeans in animal feed to 10% by 2030, down from 18% in 2017.
A Ministry of Agriculture report released in May said that these efforts meant import demand would steadily fall over the coming years.
But thanks to limited farming land and ballooning demand, China it is still a long way from its goals to meet half of its soybean needs with domestic crops and will rely on imports for years to come, analysts said.
Chinese analysts are blunt about their country’s growing preference to buy from anywhere but the US.
“From China’s perspective, the US is an unpredictable supplier,” said Niu Haibin, director of the Centre for Latin America Studies at Shanghai Institutes for International Studies.
Tariffs mean US soybeans no longer have a price advantage and China has already identified alternative suppliers to fill the gap.
“The longer we rely on alternative sources, the dimmer the outlook for US soybean exports to China becomes,” Niu said.
Those suppliers include Argentina, Uruguay and even Russia. But it is Brazil, the world’s largest soybean exporter, that has been the big winner from China’s US embargo.
China would typically alternate between hemispheres, buying from Brazil during its March-to-June harvest season and then from the US for the remainder of each year.
But this year, instead of switching to American farms, China kept placing orders from Brazil. It imported US$4.7b in soybeans from the country in August and only US$100m worth from the US.
That continued in September, when China bought 7.2 million tonnes of soybeans from the South American country - 93% of its total exports, according to Anec, Brazil’s national association of grain exporters.
China’s effort to secure Brazilian soybeans goes far beyond merely placing big orders.
Chinese state-owned companies have taken stakes in the major Brazilian ports of Paranagua, Acu and Santos.
Cofco, China’s largest agricultural importer, has the exclusive rights to run a major new terminal at Santos that opened in March and will expand the port’s throughput by 15 million tonnes per year when it reaches full capacity in 2026.
And Beijing is still trying to lower barriers for Brazilian exporters to access its vast market.
The two countries are working on plans to build a railway connecting Brazil to Peru’s Chancay port that could cut shipping times to Asia dramatically.
With plentiful supply from South America, China has been projecting confidence that it can cold-shoulder American farmers for as long as is necessary to reach a trade deal.
Beijing once worried that the US wouldn’t sell China its soybeans, but it is now the US that is anxious for China to buy, declared one widely shared article published on social media app WeChat last week.
In response to Trump’s recent threat to retaliate by halting cooking oil trade - which Chinese analysts took to mean the US stopping purchases of used oil that can be turned into biodiesel - the state-owned Global Times newspaper declared that “there is no shortage of buyers for China’s used cooking oil”.
That defiant tone is helped by China’s sizeable stockpiles. Its soybean imports hit a record in May and were up 5.3% year-on-year for January to September to reach 95 million tonnes, according to China’s customs agency.
Beijing is in a position where it could hold out for months - possibly until new South American crops arrive in early 2026 - without needing to procure US soybeans, said Pay.
Trump’s focus on soybean purchases has only strengthened Beijing’s belief that this is an easy way to squeeze the US with minimal costs at home.
In Beijing, “there’s definitely a sense that the US is in chaos and there’s room for putting political pressure on targeted groups”, said Jack Zhang, director of the Trade War Lab at the University of Kansas.
It also gives Xi something to offer Trump in exchange for what China really wants.
“Part of the calculation,” Zhang said, “is that the US will negotiate over these small but pressing concerns and relent on some of the larger structural stuff that China’s more worried about.” These include US export controls on advanced computer chips.
Even if a deal is struck this month, it may be too late for US farmers to make up for orders already lost.
“China’s in a pretty good position. We really want to resolve this. They don’t need to,” said Luck.
Even if China started placing orders the day after Xi and Trump meet, US soybean farmers “still probably lost half of the season, so we’re on the clock here”.
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