China to cut tariffs on US farm goods, but list excludes soybeans

China plans to lower tariffs on numerous US agricultural products, including corn, wheat, meat, and dairy, according to a Commerce Ministry announcement on Monday. However, soybeans remain excluded from the tariff-reduction list, a source of disappointment for traders who fear the high 10% tariff could be detrimental to private crushers.

Despite this, Chinese state buyers have significantly increased soybean purchases, fueling concerns about political implications and Beijing's leverage over US actions, particularly in the lead-up to midterm elections.

The agreement to establish a trade council aims to discuss a reciprocal tariff cut on $30 billion worth of goods, with the goal of maintaining stable economic and trade relations. Chinese agricultural firms Sinograin and COFCO have reportedly bought over 12 million metric tons of US soybeans, nearly half of the 25 million metric tons Beijing had pledged to purchase annually through 2028.

Agricultural and related products on the list totaled about $17 billion in 2024, closely aligning with China's stated purchase commitment, excluding soybeans, according to Reuters calculations.

State-run companies will continue to buy US soybeans, ensuring China fulfills its $17 billion commitment. However, US soybeans remain less competitive in price, even with tariff reductions, according to a trader from an international company selling soybeans to China.