US, China list goods recommended for tariff cuts following Trump-Xi summit

China plans to reduce tariffs on various US agricultural products, including corn, wheat, meat, and dairy, but soybeans remain excluded from the list. This decision was part of a $60 billion reciprocal tariff reduction package announced by the Board of Trade. While the tariff cuts aim to exempt over 90% of covered products from additional tariffs, imposing only most-favored-nation rates, soybeans are still subjected to a 10% tariff.

This exclusion gives China diplomatic leverage in its dealings with the United States, particularly ahead of the US midterm elections. Chinese state-owned companies Sinograin and COFCO have already purchased more than 12 million metric tons of US soybeans, which accounts for nearly half of the 25 million tons Beijing committed to buying annually until 2028.

Despite the political significance of soybeans, traders warn that the 10% tariff is too high for private crushers to handle, even as China continues to buy US soya beans. The landed cost for US and Brazilian soybeans is approximately $595 per ton without tariffs, making it challenging for Chinese private crushers to operate at a profit.