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US Treasury Secretary Scott Bessent said on Thursday that China had agreed to buy 12 million tonnes of US soybeans during the current season through January, down from 22.5 million tonnes in the previous season after a months-long tariff battle brought purchases of the current US crop to a complete halt.
Bessent said China had also committed to buying 25 million tonnes annually for the next three years as part of a broader trade agreement with Beijing, following a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea.
The drop in Chinese demand cost American farmers - a key pillar of Trump's political base - billions of dollars in lost sales, and the agreement marks a return to normalcy in trade with the largest buyer of US soybeans, which had averaged purchases of 28.8 million tonnes over the past five harvest seasons from September to August.
"Our great soybean farmers, who the Chinese used as political pawns - that's over, and they should thrive in the years to come," Bessent told Fox Business's "Mornings with Maria" programme.
He added that the deal, negotiated in Malaysia over the weekend, could be signed as early as next week.
Bessent said other Southeast Asian countries had agreed to buy an additional 19 million tonnes of US soybeans, though he did not specify a timeframe for those purchases or name the countries involved. Asian buyers other than China have imported between 8 million and 10 million tonnes annually in recent years, according to US Census Bureau trade data.
The most actively traded soybean contract on the Chicago Board of Trade reversed earlier losses to close up 1.2% at a 15-month high of $11.07-3/4 a bushel.
US soybean export prices jumped by $20 to $30 a tonne this week as exporters anticipated the Trump-Xi meeting would spark fresh demand. Three cargoes, or roughly 180,000 tonnes, were sold to China's state-owned importer COFCO on the eve of the summit.
"These [Chinese purchase agreements] aren't unreachable numbers, but they're also not numbers that really support the idea of expanding our US soybean export programme," said Ted Seifried, chief market strategist at Zaner Ag Hedge.
Relief across the US Farm Belt
US agricultural groups welcomed the agreements after Trump's fierce trade war eroded soybean exports valued at roughly $24.5 billion last year. Farmers are nearing completion of what is expected to be the fifth-largest US harvest on record.
The shortfall in Chinese demand has squeezed farm incomes, with crop prices hovering near multi-year lows for months amid rising costs for fertiliser, seed, labour and equipment.
"This is a meaningful step forward in re-establishing a stable, long-term trade relationship that delivers results for farm families and future generations," said Caleb Ragland, president of the American Soybean Association and a Kentucky farmer.
The deal with China follows Trump securing agricultural trade deals or framework agreements with other Asian nations.
"Expanding markets and restoring purchases from China will provide some certainty for farmers who are struggling just to hang on," said Zippy Duvall, president of the American Farm Bureau Federation.
China Diversifies Soybean Purchases
In a social media post last night following his meeting with Xi, Trump wrote that the Chinese leader had authorised China to begin buying huge quantities of soybeans, sorghum and other agricultural products.
US Agriculture Secretary Brooke Rollins praised Trump's comments on soybeans and sorghum in a post on X.
But Even Rogers Pay, a director at Beijing-based Trivium China, said the agreement effectively represents a return to business as usual for US soybean exports to China.
"It's targeting a level of trade that's largely consistent with the past few years," she said.
Jonny Xiang, founder of Beijing-based Ag Radar Consulting, said commercial buyers were still waiting on details such as whether China would cut its tariff on US soybeans from 20% to 10%, or eliminate it entirely.
"If the tariff isn't fully removed, commercial buyers won't have much incentive to buy US soybeans," he said.
China, the world's largest soybean buyer and the top market for American farmers, had turned its voracious appetite for US crops into a powerful bargaining chip in the trade war.
Facing a 23% import duty on soybeans after rounds of retaliatory tariffs, Chinese buyers had largely avoided the US autumn harvest, turning instead to South American supplies.
Since the trade war of Trump's first administration, China has diversified its soybean import sources. In 2024, China bought nearly 20% of its soybeans from the United States, down from 41% in 2016, customs data show.
Source: Reuters