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Key takeaways
- US farmers may have permanently lost share of the global soybean market, as the trade war prompts China to look for alternative sources.
- The United States exported $12.6 billion worth of soybeans to China in 2024, nearly equal to the total amount exported to the rest of the world combined, making it one of America’s most important agricultural exports.
U.S. soybean farmers have been among the casualties of President Donald Trump’s trade wars, and one of their biggest sources of income may be permanently cut when the smoke clears.
That’s according to a new analysis by Kiran Ahmed, chief economist at Oxford Economics, which predicts that US soybean exports to China are unlikely to return to previous levels even if the two countries reach an agreement.
In 2024, before the start of Trump’s second term in office, American soybean farmers exported $12.6 billion worth of their crops to China, making the country their largest customer according to the Agriculture Department. That all came crashing down this year after China stopped buying U.S. soybeans altogether as part of the trade war that erupted in recent months.
“We do not expect China to purchase US soybeans during the current US export window, and although we expect China to resume purchases in the future, the US is unlikely to regain pre-tariff market share,” Ahmed wrote.
What does this mean for the economy
The collapse of soybean exports to China is one of the devastating effects of the ongoing trade wars launched by President Donald Trump in his second term in office.
The decline in exports has left farmers struggling to find new markets for their crops. The White House is making plans to give farmers some relief by sending $10 billion to $15 billion in new government tariff revenue as a bailout, according to a World Bank report. Reuters Citing unnamed officials.
The United States may have lost its soybean market share permanently, Ahmed wrote, as China shifts its supply lines to Brazil and Argentina, which have expanded production.
China uses soybeans primarily to feed its livestock, making the beans an important part of its food supply, which Chinese officials aim to protect against potential future trade conflicts. This is unlikely to change even if trade talks between the US and China succeed later this month, Ahmed wrote.
“Even as China returns to purchasing U.S. soybeans, and even if soybean tariffs are rolled back, China will continue to diversify its purchases, and the United States is unlikely to regain lost market share,” he wrote.
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