Source: Ukragroconsult (Ukraine)
According to UkrAgroConsult, quoting Bloomberg, China’s tariffs on American agricultural products are set to challenge the farming industries in both nations.
China’s prompt implementation of a 34% tariff against U.S. goods is expected to disrupt both importers and exporters, halting the supply of American products to over one billion consumers. Chinese authorities are wagering that, following the earlier “trade war” during the first Trump presidency, their domestic market is now robust enough and that American producers stand to suffer greater losses.
Soybeans illustrate this situation well. Recently, China has successfully diversified its suppliers, increasingly relying on countries like Brazil rather than the U.S. Still, soybeans remain the United States’ most significant agricultural export to China, valued at over $12 billion in 2024. China has also decreased its reliance on American corn and wheat – essential commodities for ensuring its food security.
Several other factors benefit China. Domestic grain harvests have reached historic highs, aided by initiatives to expand cultivation and boost yields. Storage facilities are well-stocked, with oversupply further intensified by slowed demand due to economic challenges. Additionally, the cyclical nature of global manufacturing has diminished American exports through the last quarter of 2024, thereby softening the blow of new tariffs.
In recent days, Chinese agricultural stocks have surged, in contrast to dips seen elsewhere, as government policies aggressively promote greater agricultural self-reliance.
For the short-term, China also prepared for renewed trade tensions by ramping up soybean purchases from America immediately after Trump’s 2024 election win. Between November 2024 and February 2025, China imported over 16 million tons of soybeans from the U.S. – a nearly 50% increase compared to the same period the previous year.
Although the U.S. once held the top position as China’s soybean supplier, Brazil has now taken the lead, contributing over 70% of China’s soybean imports in 2024.
Since Beijing authorized Brazilian corn shipments in 2022, Brazil has overtaken the U.S. in corn exports to China, leading to a sharp decline in U.S. corn sales there. The situation is similar for wheat, with China now sourcing it from countries like Australia and Kazakhstan.
Corn and wheat prices within China are hovering around five-year lows, which has negatively impacted local farmers but has also served as a financial buffer for the country, which maintains import restrictions.
Despite this shift, the U.S. remains China’s second-largest supplier of soybeans, the primary protein source for the nation’s sizable cattle population. As a result, extending the ongoing “trade war” poses certain risks, particularly as the next U.S. soybean harvest approaches and global availability tightens.
Shanghai JC Intelligence Co. has noted that soybean meal prices, important for animal feed, may increase in the near future, but they believe this potential issue can be managed.