Tariff truce brings little relief for US soy farmers
Brazil’s price edge, unfulfilled trade promises keep China buying elsewhere
13 May 2025
3 minute read
By: A surprising tariff pause between Beijing and Washington will not help US farmers gain soy sales in China without additional concessions, producers said, because top-supplier Brazil still has a competitive price advantage, reported Reuters.
Under the truce announced on Monday, the US will cut extra tariffs it imposed on Chinese imports to 30% from 145% for the next three months, while Chinese duties on US imports will fall to 10% from 125%.
Soybean export premiums fell in Brazil on the de-escalation, reflecting expectations that China could buy more from the US.
But American farmers said the tariff pause isn't enough. Brazil, the biggest soy supplier to China, has ample supplies from a record harvest and its farmers do not face the Chinese tariff that US competitors do. China, the world's largest crop importer, already sources roughly 70% of its soybean imports from Brazil.
"The tariff that remains in place for US soy is far from inconsequential," said Caleb Ragland, a farmer in Magnolia, Kentucky, and president of the American Soybean Association.
"Products purchased from our competitors in Brazil and Argentina are not burdened with this extra cost."
While the US in 2022/23 accounted for about 28% of China's soybean imports, it has been a critical market for US farmers, representing more than half of US soybean exports in the most recent marketing year.
President Donald Trump's trade war created an opportunity for Brazil. The country aims to export even more agricultural goods to China, including sorghum, pork and chicken, and seize market share, said Luis Rua, who oversees foreign trade for Brazil's Ministry of Agriculture.
"What they (China) will buy is what they barely need to get by," Dan Henebry, a corn and soy grower in Buffalo, Illinois, said. "If South America is short... they'll buy from us."
Chinese buyers have also avoided US wheat and bought 400,000 to 500,000 metric tons from Australia and Canada in recent weeks, traders said.
US farmers hope that China may buy American crops as part of trade negotiations with Washington. Some growers said they would make advance sales of their autumn corn and soy harvests if crop prices rise because of increased demand.
The pause is set to expire just before US farmers begin harvesting soybeans and corn, an important time for exports. They planted fewer soybeans this spring than last year because the crop looked less profitable than corn.
The truce did little to address underlying issues that led to the dispute, including the US trade deficit with China that has aggravated some farmers.
Beijing did not fulfil commitments to buy more US agricultural products under a trade deal it struck with Trump during his first term in 2020.
"The situation was bad before we started and something needed to be done. The situation is still bad," said Ron Heck, a corn and soy farmer in Perry, Iowa.
At the time, China had slashed purchases of US crops, prompting Trump's administration to pay farmers billions of dollars in aid.
"It doesn't appear that we solved anything after that turmoil," said Henebry. "We're right back at the baseball plate trying to see if we're going to hit a home run or strike out again."
