Key Takeaways
- China announced cuts on tariffs for US agricultural goods, excluding soybeans.
- US soybeans still face a 10% additional tariff, too high for private crushers to absorb.
- Chinese state-run companies have bought over 12 million metric tons of US soybeans.
China has announced a reduction in tariffs on a wide range of US agricultural products, including corn, wheat, meat, and dairy, according to the country's commerce ministry. However, US soybeans are not included in this tariff reduction list.
The decision to exclude soybeans from the tariff cuts has raised concerns among US farmers and traders, as the 10% additional tariff remains too high for private crushers to handle, despite increased purchases by Chinese state-run companies.
In August, Chinese state-run agricultural companies, Sinograin and COFCO, purchased more than 12 million metric tons of US soybeans, nearly half of the 25 million tons the White House has said Beijing committed to buying annually through 2028.
Despite the purchases, the White House has stated that China has yet to confirm any specific target for such purchases, leaving the commitment in question.
The US and China have agreed to form a trade council, with its first task being to discuss a reciprocal tariff cut on $30 billion worth of products, aimed at ensuring stable economic and trade ties.
The trade in the agricultural and related products on the tariff reduction list stood at approximately $17 billion in 2024, roughly matching China's reported purchase commitment, excluding soybeans.
Both sides have agreed to form a trade council, with its first task being to discuss a reciprocal tariff cut on $30 billion worth of products, aimed at ensuring stable economic and trade ties.
The announcement comes after last week's summit between Chinese President Xi Jinping and US President Donald Trump, where both leaders agreed to form a trade council to address ongoing trade issues.
