RPT-BREAKINGVIEWS-Trump’s soy reprieve is late to the harvest

By Gabriel Rubin

WASHINGTON, Oct 30 (Reuters Breakingviews) - Xi Jinping bought peace for a handful of beans. The trade war truce reached between the United States and China at a presidential meeting in South Korea rests, in part, on promises from the People’s Republic to resume purchases of American soybeans. The problem for farmers is that this still leaves their export season cut short, rivals in Brazil gaining share, and expected exports to the Asian country down over 50%.

While President Donald Trump left Busan having made progress on two critical issues – China’s restrictions on all-important rare earth metal exports, and the loss of a major customer for U.S. farmers – the biggest superpower tensions remain unresolved. Even where bargains were struck, things are hardly back to normal.

China’s offer to purchase 12 million metric tons of U.S. soybeans this year is a steep decline from 27 million in 2024 and down two-thirds from 2016, the last full year before Trump’s inaugural presidential term began. Even if added to the 5.9 million tons China has already purchased year-to-date, there would be a significant shortfall. While Treasury Secretary Scott Bessent said that purchases would return to 25 million tons next year, that leaves today’s gap unfilled. The now-established cycle of reconciliation followed by recrimination in ongoing trade talks makes any long-term promises uncertain.

China is a crucial customer, purchasing 60% of soybeans worldwide and over half of the $24 billion in U.S. exports in 2024. The European Union, in second place, purchased just $2.5 billion. The Trump administration had been readying a bailout package of as much as $15 billion for hurting farmers, Reuters reported, some of which might still be needed to prevent bankruptcies and a political revolt among a loyal Republican constituency. It wouldn't be the first time: Trump paid farmers $23 billion in trade aid during his first term.

Judging by the value and volume of soybean exports to China in 2024, according to data from the U.S. Department of Agriculture, pricing worked out to about $471 per ton. At those prices, that implies that the People’s Republic will purchase about $5.7 billion of beans this year. In return for that and a crucial easing in rare earth metals export restrictions, Trump will cut tariffs on Chinese goods by 10 percentage points. But that deal still may not save many farmers: The nation’s top soybean producing state of Illinois, led by Trump foe Governor J.B. Pritzker, has declared an agricultural trade crisis, citing soybean production losses of $100 to $200 per acre. Meanwhile, much of the crucial harvest season has already passed, and trade analysts warn that China’s increased purchases from Brazil may represent a permanent shift. All of this at a meeting that Trump rated as a “12 out of 10.” Farmers may have a different number in mind.

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CONTEXT NEWS

China agreed to purchase 12 million metric tons of U.S. soybeans this year, with future purchase plans of around 25 million per year, U.S. Treasury Secretary Scott Bessent said following high-level trade talks in South Korea.

Chinese purchases of U.S. soybeans have been frozen during the recent critical months of the export season, which typically runs through January. The country has increased purchases from Brazil during the period.