US President Donald Trump on Tuesday claimed that China is “purposefully” not buying the soybeans from their farmers, and this is the reason they are considering terminating the business with Beijing.Calling China’s deliberate work an “economically hostile act,” Trump said that they can make the cooking oil themselves and don’t need China for that. In a post on Truth Social, Trump said, “I believe that China purposefully not buying our Soybeans, and causing difficulty for our Soybean Farmers, is an Economically Hostile Act. We are considering terminating business with China having to do with Cooking Oil, and other elements of Trade, as retribution. As an example, we can easily produce Cooking Oil ourselves, we don’t need to purchase it from China.”The United States soya bean harvest is under way, and China, once the biggest buyer of American soybeans, hasn’t booked a single purchase, sending prices tumbling and farmers into panic. The abrupt halt mirrors Beijing’s previous use of rare earth exports as leverage in trade wars. Now, it’s soybeans.
Why does it matter?
The United States, which exports approximately 61% of the world’s soybeans, has recorded zero purchases from China for the current harvest, a sharp decline from Rs 1.05 lakh crore in purchases last year. This shift is part of an escalating trade dispute, with Beijing leveraging economic measures in response to President Trump’s renewed tariffs. Lu Ting, chief China economist at Nomura Holdings, stated, “US soybeans now are not that important to China. That’s why Beijing can afford to use the import ban as a bargaining tool.” Additionally, the Trump tariffs have increased costs for fertilizer and equipment, thereby reducing farmers’ profit margins. Farmers across the Midwest have begun storing crops, postponing sales, and observing declining futures markets. Morey Hill, a soybean grower from Iowa, told the Wall Street Journal, “There’s no incentive to sell right now.” Hill warned that without a timely agreement with China, the soybean market “might be a bloodbath.” US farmers are currently grappling with higher expenses and a reduction in buyers.
Is it soy war or something else
This isn’t just about soy. This situation mirrors China’s earlier strategy with rare earth minerals, used as leverage in negotiations with the Trump administration over export controls. Now, as the soybean harvest commences, Beijing is repeating this tactic. Lu Ting noted, “Beijing’s new bargaining chip is an import ban on US soybean,” as reported by Bloomberg.While soybeans may not possess the unique qualities of rare earths, they are essential for China’s substantial hog and poultry industries. Escalating trade tensions have led China to increase soybean imports from South America, purchasing 2 million tons from Argentina in September alone. Dean Buchholz, a farmer concluding his final crop this year, expressed his dissatisfaction to the Wall Street Journal, saying, “I always thought I would farm till they threw dirt on top of me.” He added, “I can’t make it work to where it would be practical to keep going without me spending a boatload of money and keep putting myself into more debt.” Caleb Ragland, 39, a Kentucky farmer and president of the American Soybean Association, commented, “The frustration is overwhelming.” The timing compounds the issue, as over half of US soybean exports typically occur between October and December, immediately following harvest. China is delaying purchases until February when Brazil’s crop becomes available. Sarah Taber, a crop scientist and blogger from North Carolina, remarked, “We knew what Trump would do. And a lot of farmers just voted for him anyway.” Taber warned that if no agreement is reached by December, US soy exports could miss the entire global buying window.
