Chinese imports of Brazilian soybeans rise, despite US trade deal

Despite a recent trade deal reached between President Donald Trump and President Xi Jinping, China has increased imports of Brazilian soybeans, a major North Carolina cash crop, causing experts to express concerns about the stability of the trade deal. 

In the recent trade deal with China, Trump promised China a 10% reduction of tariffs on US imports. Additionally, US Treasury Secretary Scott Bessent said China committed to return to “regular levels” of imports of US soybeans over the next three years, according to an Axios report.

Despite these promises, China has increased its orders of soybeans from Brazil, as South American countries have lowered their prices on soybeans in anticipation of the tariff reduction on US imports, according to a report by Reuters. 

According to three traders, buyers have booked 10 cargo shipments of Brazilian soybeans for December and 10 for March through July, with South American prices now being lower than US prices, reported Reuters. Previously, South American prices had been higher than US prices, before the 10% tariff decrease on US imports was implemented. 

“Brazil is now cheaper than US Gulf, and buyers are taking this opportunity to book cargoes,” a trader at an international company that runs oilseed processing plants in China told Reuters. “We are seeing increased demand for Brazilian beans since last week.”

Experts have expressed concerns about the stability of the recent trade deal with China. 

“It is an open question of how long this trade deal is going to last,” said Michael Sobolik, senior fellow at the Hudson Institute. 

Following the meeting in Busan, South Korea, Chinese diplomats began telegraphing members of the US media that they had more demands that were not communicated at the table, said Sobolik. China is using these demands as leverage to increase the cost of compliance.

“It’s not a new trick, but it’s a very unsurprising trick. Aand I don’t imagine that the president will take kindly to this approach,” said Sobolik. “I also cannot imagine that the folks in the administration who are much more forward-leaning on China than he is are going to take kindly to this approach either.”

Experts like Sobolik and Craig Singleton, a senior fellow at the Foundation for Defense of Democracies, have asserted that China actually clearly communicates its pain points fairly clearly. 

“They tell us what they are, if you listen to them,” said Sobolik. “But the question is, do we have the unity of focus and the resolve to respond in kind on those particular thresholds? I don’t know, and I think we’ll  find out.” 

China, the No. 1 importer of US soybeans, began cutting back on imports of US soybeans after “Liberation Day” in April. Soybeans dropped significantly from 72,000 tons the week of April 10 to only 1,800 tons the week of April 24, as reported by The Wall Street Journal. Earlier this year, Trump raised the tariff on Chinese goods to 84% and later to 145%. This sparked a retaliation, with China increasing the tariff on US exports to 125%. 

“Beijing called our bluff on rare-earths; there was nothing that the Chinese wanted more than to talk to taunt,” said Singleton. “They needed calm to reorient themselves amidst all of these problems they’re facing, so to taunt is what they want. It’s a trap for us; it’s a trap for them in some respects.”

The soybean industry contributes  $2.4 billion to the state economy annually, Charles Hall, executive director of the North Carolina Soybean Association, told the Carolina Journal in a previous interview. 

“Chinese imports of Brazilian soybeans rise, despite US trade deal” was originally published on www.carolinajournal.com.