Chinese state buyers are buying more US soybeans, but traders warn a 10% extra tariff is more than private crushers can bear.
China's commerce ministry issued a list on Sept. 28 that puts US grain, meat, and dairy in line for lower tariffs, Reuters reported. Soybeans are not on the list.
Key Facts
- In line with China's reported purchase commitment, 2024 trade in the list's farm-related products was about $17 billion.
- China's list reaches beyond grain to fruit, vegetables, and nuts.
- Absent from the list, US soybeans still face an additional 10% tariff.
The White House posted the list of 1,619 US product lines on Sept. 27. The terms of reference value it at roughly $30 billion, based on 2024 trade. A comparably valued list of Chinese goods for the US market went up beside it. Both come from the U.S.-China Board of Trade's 30-for-30 framework.
Xi Jinping and Donald Trump met in Washington last week, and the lists followed. Reuters put the two-way package at $60 billion.
Which US Farm Goods Are on China's Tariff List
Reuters named grain, meat, and dairy among the covered goods. The White House posting goes further, with lines such as these:
- Fruit, including avocados, apples, and cherries
- Vegetables, including potatoes, tomatoes, and broccoli
- Tree nuts, including almonds, walnuts, and pistachios
- Processed goods, including frozen potatoes, orange juice, and canned peaches
The list names product lines but gives no tariff rates, so it does not show which lines carry an additional tariff today. The commerce ministry said additional tariffs would come off more than 90% of the covered products, per Reuters. Those goods would pay most-favored-nation rates instead, Reuters reported.
US Soybeans Still Face a 10% Additional Tariff in China
Soyoil, soymeal, and soy flour are on the list. So are seed soybeans. Soybeans other than seed have no line on it. They still face an additional 10% tariff, Reuters reported.
Reuters quoted Hutong Research's Feng Chucheng as saying a separate soybean track gives Beijing bargaining power with Washington ahead of the US midterms.
Reuters reported that traders warn the 10% rate is more than private crushers can absorb. Chinese state buyers have stepped up purchases regardless, per the same report. US and Brazilian soybeans both land in China at roughly $595 a ton before tariffs, according to traders.
Brazilian beans are preferred for their higher oil and protein content, per the same traders. Private crushers are running negative margins at those prices, per Reuters.
What the White House Terms of Reference Say About Timing
The terms of reference say future tariff reductions on the listed products will be set and put in place under each side's own domestic legal processes. Reuters reported that the proposal does not say when the cuts take effect. Deputies will monitor trade in the covered goods, and the two sides do not expect adjustments more than once a year.
Reuters calculated that 2024 trade in the list's farm-related products came to about $17 billion, close to China's reported purchase commitment with soybeans set aside. The White House said in May that Beijing agreed to buy that volume every year through 2028, Reuters noted.
China has yet to confirm a target for the purchases, per Reuters.
