The US-China soybean comeback that could reshape global markets

The late October meeting between US President Donald Trump and Chinese President Xi Jinping in Busan produced a striking announcement. US officials declared that China pledged to resume large-scale purchases of American soybeans — 12 million metric tonnes (MMT) by the end of February next year, and at least 25 MMT annually for the following three years in 2026, 2027 and 2028.

While Beijing has yet to formally confirm the figures at the time of writing, the pledge — based on volume rather than value of soybeans — marks a significant thaw in agricultural relations amid continued US–China trade tensions. In the days leading up to the summit, state-owned enterprise China Oil and Foodstuffs Corporation (COFCO) quietly booked three American soybean cargoes from the new harvest, as a gesture of goodwill.

Washington framed the outcome as a notable diplomatic success. According to the White House, the Busan commitments would bring total US soybean exports to China in 2025 to around 18 MMT — still down 32% year-on-year, but politically significant. 

The reaction in the US was immediate. Soybean futures surged to their highest points since June 2024 on the Chicago Board of Trade. 

In late November, media reports indicated that at least ten cargoes of US soybeans (worth around US$300 million) were booked following a phone call between Xi and Trump in late November. Trump said that he had pressed Xi to accelerate and increase Beijing’s purchases of American goods during the call, and that the Chinese leader had “more or less agreed“. Since then, state-run grain buyer COFCO has booked nearly 2 million tonnes of US soybeans since late October. Nonetheless, the recent deals remain significantly below the 12 MMT of purchases announced by the White House.

The first shipments of American soybeans since May are now scheduled to load at New Orleans. 

Food security has long been a concern for the Chinese authorities. Since 2013, China has adopted a dual strategy for food security: maintaining self-sufficiency in staples (such as rice) and key proteins (for instance, pork) through local production, while also relying on global markets for non-staples (like soybeans).

Soybeans are a key source of cooking oil and animal feed, as well as a major commodity at the centre of Beijing’s trade relations with Washington. Despite being the world’s fourth-largest producer, China consumes more than 60% of the global soybean trade. Most domestic soybeans are allocated to food-grade uses — such as tofu, soy milk and other traditional products — while imports meet over 80% of national demand for animal feed and edible oil. Rapid growth in China’s livestock and aquaculture sectors has made soybean meal indispensable, reinforcing the importance of global supply chains.

This structural dependence has made soybeans both a strategic resource and a geopolitical vulnerability, shaping Beijing’s long-term planning and short-term diplomatic engagements. 

China’s experience during the first US–China trade war accelerated long-standing efforts to diversify away from heavy reliance on a single supplier. When Washington imposed tariffs on US$370 billion worth of Chinese goods during Trump’s first term, Beijing responded with retaliatory duties of up to 25% on American agricultural products, including soybeans. The episode highlighted the risks inherent in concentrated supply chains and spurred a shift in sourcing patterns.

Until 2018, American farmers supplied roughly one-third of China’s soybean imports. In 2016, the US held a 40% market share, while Brazil supplied 46%. After the trade war began, Brazil rapidly overtook the US. By 2018, Brazil accounted for an enormous 82% of China’s soybean imports, while the US share fell to 19%.

Brazil’s dominance has persisted. In 2024, China imported a record 105 million tonnes of soybeans: Brazil supplied 74.55 million tonnes (71.1%), the US exported 22.14 million tonnes (21.1%) and Argentina provided 4.1 million tonnes (3.9%). 

This trend has continued in 2025. Between January and August, China imported only 5.93 MMT of US soybeans, representing a steep 78% year-on-year decline compared with when China purchased about half of all US soybean exports.

Following Beijing’s raised tariffs on US soybeans to 34% April this year, US soybean exports slumped to nearly zero amid US-China tensions.  In August alone, Chinese importers booked 64 Brazilian cargoes (around 4 million tonnes) for October–November delivery, with no American cargoes recorded. In contrast, Brazil exported 68.04 MMT of soybeans during the January-August period. 

To hedge further, China has sought new sources. Recent agreements with Ethiopia, Angola and Russia reflect an ongoing effort to cultivate alternative suppliers for both soybeans and soybean meal. 

At the same time, China’s domestic soybean output is projected to reach 23 million tonnes this year, a 17% increase over five years. The country is also on track to reduce reliance on imported soybeans to under 30% within a decade.

China’s livestock consumption has surged over the past two decades, making soymeal a critical component of animal feed. Even modest supply disruptions can affect domestic food prices, household budgets, and complicate Beijing’s broader food security strategy. In this context, the partial restoration of US soybean purchases functions as both economic diplomacy and an insurance mechanism — a hedge against overreliance on a single supplier and a buffer against future geopolitical shocks.

Yet Beijing’s vulnerabilities persist. Dependence on external suppliers leaves China exposed to geopolitical, market and climate volatility. Even with diversification towards Brazil, Argentina and other sources, supply shocks in any major exporting region can ripple through domestic prices and strategic planning. For instance, extreme weather events affecting key breadbaskets in China and/or in other agricultural powerhouse producer/exporters (such as Russia and Brazil) could compel Beijing to rely more heavily on traditional (Western) exporters such as the US.

The implications for the US are significant. China’s resumption of purchases carries both economic and political weight. The US exports more soybeans by value than any other agricultural product — with soybean exports alone exceeding US$24 billion in 2024, and China has long been the dominant buyer. The Midwest — spanning Iowa, Illinois, Minnesota, Nebraska and Indiana — is both the heart of US soybean production and a core pillar of Donald Trump’s electoral base.

In the months leading up to the Busan summit, lobbying intensified, with farm associations and state groups warning that prolonged restrictions threatened livelihoods. Midwestern farmers pressed Washington to restore trade flows, highlighting the economic and political stakes.

Renewed Chinese purchases offer immediate relief. But also expose vulnerabilities: with Brazil’s bumper soybean harvest expected to hit markets next month, global oilseed prices are expected to plummet. US soybean prices — which have remained higher than Brazilian prices since late October — are expected to fall, likely translating into substantial savings for Chinese buyers.

Adding to concerns, US agriculture remains heavily dependent on China. Short-term gains in income come with longer-term vulnerability to shifts in US–China relations, tariff changes, or renewed tensions over politically sensitive issues (such as Taiwan). 

Global trade and supply chain repercussions are also significant. As the world’s largest food producer and importer, changes in Beijing’s agricultural trade policy influence flows of food, capital and trade. Redirecting part of its purchases back to the US may end up reverberating across global supply chains, particularly given China’s heavy reliance on South American suppliers during the US–China trade war. 

Even modest adjustments in sourcing could free up millions of tonnes of soybeans for other major importing countries and regions, prompting price and production shifts among exporters. Notably, Southeast Asia, the Middle East and Africa — regions with rapidly expanding livestock sectors due in part to rising incomes and changing dietary patterns — stand to benefit from increased soybean availability and potentially more competitive prices. 

The Busan handshake signals a cautious recalibration in US–China agricultural relations, offering short-term relief for farmers and a strategic hedge for Beijing. Yet both sides remain exposed: China to supply and climate risks, and the US to overreliance on a single buyer. As global soybean flows adjust, the deal underscores how deeply intertwined trade, domestic politics and food security have become in an era of shifting geopolitical and environmental pressures.

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