The Magic Beans

In China-U.S. trade relations, there is one commodity that cannot be overlooked: soybeans.

China is the world’s largest importer of soybeans. With China already supporting nearly 20 percent of the global population, China’s soybean imports increased from 293,900 tons in 1995 to 105 million tons in 2024, at a cost of around $52.7 billion, accounting for nearly 70 percent of its total grain import bill.

The U.S., meanwhile, is one of the world’s leading soybean exporters. More than half of the soybeans grown in the U.S. are sold overseas, and for nearly two decades, China has been its largest foreign market. At their peak, U.S. soybeans made up nearly 40 percent of China’s total soybean imports.

Soybeans are a prime example of the win-win cooperation between China and the U.S. within the framework of economic globalization. Many American farmers and agricultural businesses benefited from this heaven-made match.

The perfect trade pattern was broken in March 2018, as the Donald Trump administration launched the first round of its trade war with China, imposing tariffs on a wide range of Chinese goods. China swiftly retaliated, imposing equivalent tariffs on U.S. products. As a result, U.S. soybean exports were hit hard, losing nearly 10 percent of their market share in China. During Trump’s first term, U.S. agriculture suffered losses exceeding $26 billion due to tariff policies, with the soybean industry accounting for nearly $20 billion.

In 2023, China’s soybean purchases from the U.S. accounted for 51 percent of its total soybean imports, and in 2024, nearly 48 percent of U.S. soybean exports went to China. In that year, U.S. soybean exports to China were valued at $12.84 billion, maintaining a significant role in China-U.S. trade. Currently, however, China imports 70 percent of its soybeans from Brazil, more than three times the amount imported from the United States.

On the other hand, while China has reduced its soybean imports from the U.S., it has increased imports of meat and meat products, now worth $2.99 billion, and processed livestock feeds, valued at $1.29 billion. The U.S. is China’s second largest source for both of these categories, which are closely related to soybeans.

With Trump’s return in 2025, the U.S.-provoked trade war has escalated once again. At current tariff levels, U.S. soybeans no longer hold a price advantage in China and may even lose their entire market share. In fact, China had already made extensive preparations to deal with the full-scale escalation of the trade war seven years ago. Oil World, one of the most authoritative publications in the international oilseed and edible oil sector, recently pointed out that China’s soybean imports from Brazil have already reached a historical high. The publication predicted China’s soybean imports will continue to rise significantly in the second quarter to replenish its reduced reserves, caused by the sharp decline in U.S. soybean imports.

This is undoubtedly a huge boost for Brazilian soybean farmers. Brazil’s soybean production is expected to reach a record 169 million tons this year, nearly enough to meet China’s demand. However, the situation is different for U.S. soybean farmers. No other country, except China, can absorb such a large volume of soybeans.

Many international media outlets have reported on the story of 38-year-old soybean farmer Caleb Ragland from Kentucky in the U.S., who also serves as president of the American Soybean Association, representing 500,000 growers. Ragland has publicly called on Trump to end the trade war. His farm is expected to lose $150,000 this year, relying heavily on loans to stay afloat, while his neighbors have started to go bankrupt and sell their land. The hard work of several generations could be wiped out by a single policy. Ironically, these farmers facing bankruptcy have been some of the Republican Party’s most important supporters. Among the 10 states that produce the most soybeans, all but Illinois and Minnesota voted for Trump in the last election.

This soybean story could have had a better ending. With their deeply integrated supply chains and highly complementary economies, China and the U.S. stand to lose from any forced decoupling—an approach that is neither practical nor beneficial to either side.