China Cuts Tariffs On US Farm Goods, But Soybeans Remain Excluded From Relief

China is set to reduce tariffs on a wide range of US agricultural products, including corn, wheat, meat and dairy, but soybeans, its biggest US farm import, have been excluded from the tariff-relief list jointly issued by China’s Commerce Ministry and the White House.

Markets had been awaiting details of tariff reductions on US agricultural products following last week’s Washington summit between Chinese President Xi Jinping and US President Donald Trump.

The agricultural measures are part of a $60 billion package of reciprocal tariff cuts negotiated by the Board of Trade and unveiled on Monday.

Over 90% Of Covered Products To Get Tariff Relief

The list includes corn, wheat, sorghum, meat, dairy products, vegetable oils and meals, including soy oil and soymeal.

More than 90% of the products covered by the agreement will be exempt from additional tariffs imposed by the two countries and will instead be subject to most-favoured-nation tariff rates, China’s Commerce Ministry said.

However, the proposal does not specify when the tariff reductions will take effect.

Trade in the agricultural and related products included on Monday’s list was worth about $17 billion in 2024, broadly matching China’s reported purchase commitment when soybeans are excluded, according to Reuters calculations.

US Soybeans Still Face Additional 10% Tariff

US soybeans remain subject to an additional 10% tariff. Traders have warned that the levy is too high for private Chinese crushers to absorb, even as state buyers increase purchases.

“Despite the soybean being a non-sensitive item in trade, the political significance of China’s soybean purchase is enormous and carries major political implications,” said Feng Chucheng, founder and partner at Hutong Research.

Feng said keeping soybeans separate gives Beijing leverage in negotiations with Washington, particularly ahead of the US midterm elections.

Chinese state-run agricultural companies Sinograin and COFCO have purchased more than 12 million metric tons of US soybeans. That is nearly half of the 25 million metric tons the White House has said Beijing committed to buying annually through 2028.

China Yet To Confirm Soybean Purchase Target

The White House said in May that Beijing had agreed to purchase 25 million metric tons of US soybeans annually through 2028. China, however, has not confirmed a target for such purchases.

A trader based in Asia with an international company selling soybeans to China said state-run companies would continue purchasing US soybeans, while tariff reductions on other agricultural goods would help China meet the $17 billion commitment. The trader spoke on condition of anonymity.

Without tariffs, the landed cost of US and Brazilian soybeans is about $595 per ton, according to traders. Brazilian soybeans are generally preferred because of their higher oil and protein content.

At those prices, private Chinese crushers are operating at negative margins.

Also Watch:

Chicago Soybean Futures Fall

The most-active soybean contract on the Chicago Board of Trade was down 1.38% at $13-3/4 per bushel as of 0709 GMT.

The tariff reductions on other US agricultural products could expand trade between the two countries, but the continued 10% additional tariff on soybeans leaves a significant part of their agricultural trade outside the relief package.

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