By Jim Sutter, CEO, U.S. Soybean Export Council  

Jim Sutter, CEO, U.S. Soybean Export Council

As we look forward to the future of international exports, I’m thinking about the intent and beneficial trade opportunities of the U.S.-China Phase One agreement that was successfully negotiated and signed January 15, 2020—five years ago this week, as noted by the American Soybean theme this issue. 

Although the full scope of the Phase One agreement was sidelined by the COVID-19 pandemic and never fully delivered on its promises, the agricultural purchase commitments and removal of non-tariff structural barriers that were negotiated in the agreement led to two consecutive years of record-setting U.S. agricultural product exports to China. Indeed, China was the largest purchaser of U.S. agricultural goods in 2023, buying $33.7 billion worth of U.S. farm-produced agricultural commodities1. It was a good step in dealing with the thorny balance of trade situation.  

The Phase One agreement laid a foundation for mutually beneficial cooperation and recognized the significant opportunity of the China export market. Starting in the early 1980s, ASA established and grew the U.S. soy market with China for nearly 25 years, and that work has been continued by USSEC since 2006. During this now 40-plus year relationship with China, the soy industry has worked to create a preference for U.S. soy in the Chinese marketplace by differentiating the nutritional and sustainability advantages of U.S. soy, building trust, and fostering relationships with our Chinese trade partners.  

In the 2023-24 marketing year, less than 40% of U.S. soy exports went to China, down from a high of 60% five years ago2. Both the U.S. and China are diversifying their soy sales and purchase programs—but given China’s role as the largest soy importer in the world, the U.S. does not want to say goodbye to this market.  

China is a good example of a country that has learned to use imports of soybeans as an important tool to help ensure nutrition security for its citizens. This example of the economic principle of comparative advantage in action is something we highlight and encourage other countries to consider.  

For U.S. soybean farmers, the Chinese export market is an important destination to keep in the overall portfolio of customers. Many factors impact markets and create shifting market trends. With rising per capita income and continued urbanization, China’s growing demand for U.S. soy represents significant opportunity and should remain a consistent importer. China currently leads the world in the production of feed, pork, eggs and aquaculture produced with soy-based products.  

Frankly, China wants and needs the high-quality, sustainably produced agricultural products the U.S. has in abundance. A renewed trade conflict could erode the reputation of U.S. soybeans as a reliable food supply, making it difficult for U.S. farmers to regain this market. Rather than risk this relationship, let’s capitalize on it for the greater good by looking at the agreement that was signed five years ago and using it as a template for a new agreement.  

Even as we acknowledge the significant issues that exist between the two largest economies in the world, let’s remember that the U.S.-China agricultural trade relationship has clearly proven to be a long-term, win-win collaboration for global nutrition security and a greener, more resilient supply chain. 

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1 USDA Economic Research Service  

2 Calculations for soy complex (whole beans, meal and oil) based on USDA GATS data.