By Virginia Houston, ASA Director of Government Affairs 

In the world of soybean trade, it is hard to overstate the importance of China as a customer. Our trading partners are, of course, all critical to the success of U.S. soy growers, but no export destination compares to China when it comes to volume and value. In marketing year (MY) 2022/2023, the export value of U.S. soybeans totaled approximately $32.6 billion. China accounted for over $18.8 billion of this total. For perspective, the next largest destination by value totaled approximately $3.3 billion. The sheer scale of China’s demand for soybeans—more than 60% of global soy imports—cannot be replaced. 

Every reader of this magazine will recall the impacts of the 2018 trade war with China on U.S. soybeans. According to a United States Department of Agriculture’s Economic Research Service (USDA-ERS) analysis on the impact of Chinese retaliatory tariffs, U.S. exports to China dropped 76% from 2017 to 2018. Furthermore, ERS estimated the trade war cost U.S. agriculture over $27 billion. Of those losses, soybeans accounted for 71%.  

While prices and Chinese demand have stabilized since the U.S.-China Phase One agreement was signed in January 2020, we are once again facing a presidential election that could jeopardize that trading relationship. Prior to the Republican National Convention meeting in Milwaukee, Wisconsin, in July, the RNC formally adopted a party platform that advocates for the revocation of China’s Permanent Normal Trade Relations (PNTR) status. Furthermore, former President—and current Republican presidential candidate—Donald Trump has stated his intent to reignite the 2018 trade war by implementing anywhere from a 10% to a 60% tariff on all Chinese imports.  

It is very likely that a change in China’s trade status would result in immediate retaliation from Beijing, as soybeans were among the first products targeted when the trade war began in summer 2018. If past is prologue, it is entirely possible U.S. soybeans would again be impacted. 

We are also seeing anti-China rhetoric gain traction on Capitol Hill from both Republicans and Democrats. ASA President Josh Gackle participated in a House Agriculture Committee hearing this spring on “The Danger China Poses to American Agriculture.” During his 4.5 hours at the witness table, Gackle was able to remind committee members of the strong economic relationship our industry has with China and how much work U.S. soy has done to cultivate the Chinese market the past 40 years. As we look ahead to the next six months, your voices as U.S. soybean farmers will be more important than ever to combat the rise of anti-China—and what could be anti-trade—rhetoric from Washington.  

This last statement should not be interpreted as suggesting China get a pass on its longstanding history of unfair and unethical practices with the U.S. and other countries across intellectual property, biotechnology and other sectors; it is instead a reminder that good trade diplomacy must involve just that: diplomacy. The scars of the 2018 trade war are fresh—and ongoing—for U.S. soybean farmers. In the midst of real geopolitical issues, taking great care in how we approach China will be key to ensuring soy farmers retain access to this major market. 

Make no mistake: The world is watching the U.S. to see what will happen this November, and China is no exception. The tit-for-tat tariff dispute may have been quiet the past several years, but we are keenly aware markets built over decades can be lost overnight.