Soybeans: China’s new bargaining chip in trade war with US?
South China Morning Post | 3 October 2025
Soybeans: China’s new bargaining chip in trade war with US?
by Alice Liand, Kandy Wong
While US officials express expectations of meaningful progress in the next round of trade talks – where agricultural purchases are likely to top the agenda – analysts suggest soybeans are poised to become a key bargaining chip for China in upcoming negotiations, and a comprehensive deal may not be easily signed.
James Downes, executive co-director at the Centre for Research and Social Progress, an Italian think tank, said that US President Donald Trump was “strongly motivated” to secure a soybean deal with China.
“US farmers have been hurt by China’s refusal to buy American soybeans, which is a major source of economic pressure on rural agricultural communities that largely support the US president politically,” Downes said.
However, unlike the role agricultural purchases played in securing a comprehensive trade deal between China and the US in the first trade war, Downes said a similar agreement appears unlikely to be reached in the near term due to the ongoing broader trade tensions between the two countries.
“China actually holds a lot of cards in its negotiations with the US,” he said. “China is expected to seek substantial concessions as part of any deal, most notably with meaningful tariff reductions and guarantees regarding intellectual property protections.
“These demands clearly reflect China’s power or strategic leverage in the trade talks and its efforts to gain more favourable terms with the US.”
Soybeans, one of the most important US agricultural exports to China – the world’s biggest soybean consumer – and long used by Beijing as a bargaining tool in trade relations with Washington, are now back on the authorities’ agenda during the US harvest season.
With continuous urges from US soybean farmers for reaching a deal with China, US Secretary of the Treasury Scott Bessent said on Thursday that some “substantial support” for US farmers, especially soybean farmers, would be announced on Tuesday, adding that Trump has “got their back”.
Meanwhile, he said that trade officials from China and the US could start talking about agricultural purchases, and the next round should “show a pretty big breakthrough”.
On the same day, Trump said on social media that soybeans would be a “major topic of discussion” in his meeting with President Xi Jinping during the Asia-Pacific Economic Cooperation forum in South Korea towards the end of October.
He also said that China had stopped buying US soybeans for “negotiating reasons only”.
Doug Barry, a former executive of the US-China Business Council, said a soybean deal was probable.
“Farmers are an important interest group, and their senators from red states are no doubt giving Trump an earful,” Barry said. “Small US businesses engaged in China trade need help, too.
“Some relief on tariffs will keep them solvent, but I’m not optimistic.”
Meanwhile, Rajiv Biswas, CEO of Asia-Pacific Economics, also noted that China’s reduced soybean imports from the US have put “tremendous financial pressure” on American farmers, giving Beijing a bargaining chip to extract concessions from Washington.
“Soybeans could also be a powerful trump card that China could use to seek a further extension of the November 10 deadline for implementation of higher US tariffs on Chinese exports,” Biswas said.
He added that China may also seek loosened US technology-export restrictions for Chinese firms and their global subsidiaries, particularly in light of the recently tightened rules targeting not only companies already on the US Entity List but also their affiliates.
After four rounds of negotiations following tit-for-tat tariff hikes earlier this year, the second 90-day pause between the world’s two largest economies is nearing its expiration in November.
“The Trump administration has been aware of the tough situation for US farmers,” according to a Nomura note on Thursday by economists Wang Jing and Lu Ting, adding that soybeans were becoming China’s next bargaining chip after rare earths.
Soybeans were the single largest item by value that the US sold to China before the trade war in 2018, and China had been the largest buyer of US soybeans, the note said, adding that Beijing’s diversification strategy has made US soybeans less important to China, so “Beijing can afford to use the import ban as a bargaining tool”.
“Beijing has claimed that the ‘unjustified’ US tariff is a major barrier to its purchases of US soybeans, making its refusal to buy US soybeans another major bargaining chip for incoming rounds of trade negotiations,” the note said. “In the near term, the use of export and import bans could help cap US-China bilateral tariffs.”
But the Nomura note cautioned that the frequent use of such tactics could further derail relations between the world’s two largest economies and disrupt global supply chains.
Soybeans were a centrepiece of China’s purchase commitments in the 2020 phase-one trade deal, and they were also among the first batch of agricultural products that Beijing targeted with a 10 per cent tariff in March in retaliation for Washington’s fentanyl-related tariffs.
Instead of the US, China has turned to South America, primarily Brazil, for its soybean supplies.
In the first eight months of this year, China imported 52.74 million tonnes of soybeans from Brazil, accounting for 71.9 per cent of China’s total soybean imports during the period, customs data showed.
