By Jamie Martin
China’s government will partially roll back retaliatory tariffs on U.S. agricultural imports following the latest meeting between leaders from both countries. Starting November 10, Beijing will scrap duties of up to 15% on selected U.S. farm goods. However, the 13% tariff on U.S. soybeans remains, a move that continues to disadvantage American exporters in comparison to Brazil.
Market reaction was cautious. “The tariff cut nonetheless leaves Chinese buyers of U.S. soybeans facing tariffs of 13%, a cost traders said makes U.S. shipments still too expensive for commercial buyers, compared to Brazilian alternatives,” said one trader at an international trading company. “We don’t expect any demand from China to return to the U.S. market with this change, Brazil is cheaper than the United States and even non-Chinese buyers are taking Brazilian cargoes.”
The White House reported that China had agreed to buy 12 million metric tons of U.S. soybeans by year-end and 25 million tons annually through 2028. Yet, Beijing has not confirmed these figures, and traders remain skeptical until firm orders are reported.
Chinese importers have stepped up purchases from Brazil as prices have eased. Traders report at least 20 cargoes booked for December through July shipment. Brazilian soybeans for December are quoted at $2.25–$2.30 per bushel above the Chicago January futures, cheaper than U.S. Gulf offers at $2.40.
Economists caution that verifying these purchases will be harder during the U.S. government shutdown, which has delayed USDA export data. Kansas State University’s Allen Featherstone said analysts are turning to commercial data, but accuracy varies. This uncertainty underscores the continuing challenges of tracking agricultural trade in a politically tense environment.
Read the related article: U.S. soybean farmers face slow China rebound
Photo Credit stock-urpspoteko
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