China Cuts Tariffs on U.S. Farm Goods, but Soybeans Stay Out

China is moving to lower tariffs on a wide range of U.S. agricultural products, including corn, wheat, meat, dairy, sorghum and vegetable oils. But one of the most important products in the U.S.-China agricultural trade relationship has been left out: soybeans.

China's Commerce Ministry released a tariff-reduction list on September 28 covering 1,619 U.S. products as part of a broader trade arrangement between Washington and Beijing. The development follows last week's meeting between U.S. President Donald Trump and Chinese President Xi Jinping and signals some progress in efforts to stabilize trade ties.

However, the exclusion of soybeans means the agreement does not remove one of the most sensitive issues for U.S. farmers, Chinese soybean processors and global agricultural markets.

What Products Will Get Tariff Relief?

The Chinese list covers a broad group of agricultural products.

These include corn, wheat, sorghum, vegetable oils and meals, including soyoil and soymeal. Meat and dairy products are also included, along with other agricultural goods. The agricultural and related products on the list accounted for roughly $17 billion of trade in 2024, according to Reuters calculations.

The tariff changes are part of a wider effort by the two countries to reduce some of the trade barriers that have accumulated during their prolonged economic dispute.

China and the U.S. have also agreed to establish a trade council. Its initial task will include discussions around reciprocal tariff reductions covering about $30 billion of products.

For companies involved in the affected agricultural categories, lower tariffs could improve access to the Chinese market by making U.S. products more competitive against supplies from other exporters.

Why Are U.S. Soybeans Still Excluded?

Soybeans are the most closely watched omission from the list.

China is the world's largest soybean importer, and the crop has historically been one of the most important U.S. agricultural exports to the Chinese market. Yet U.S. soybeans will continue to face an additional 10% tariff under the current arrangement. Traders have warned that the additional cost remains difficult for private Chinese soybean crushers to absorb.

The situation is particularly significant because Chinese state-owned buyers have already been purchasing U.S. soybeans.

Chinese state-run companies Sinograin and COFCO have bought more than 12 million metric tons of U.S. soybeans, according to Reuters. That represents nearly half of the 25 million metric tons of annual purchases that the White House has said China committed to making through 2028. China itself has not confirmed that annual target.

This creates an unusual situation: Chinese buyers can purchase U.S. soybeans, but the tariff structure still makes those purchases more expensive for commercial processors.

What It Means for U.S. Farmers

The tariff reduction is positive for several U.S. agricultural exporters because lower import duties can improve their competitiveness in China.

Corn, wheat, sorghum, dairy and meat producers could potentially benefit if Chinese buyers increase purchases as tariff barriers decline. The effect will depend on actual demand, prices and the availability of competing supplies.

Soybean farmers, however, face a different situation.

The continued 10% additional tariff keeps U.S. soybeans at a disadvantage compared with supplies from major competitors such as Brazil. That matters because Chinese buyers have already been shifting substantial soybean demand toward South America.

Earlier this year, Reuters reported that Chinese soybean processors were increasing purchases from Brazil as record production and competitive prices supported South American shipments.

The longer U.S. soybeans remain relatively expensive, the more important established Brazilian supply chains could become for Chinese importers.

The Brazil Factor

The soybean issue is not simply about Washington and Beijing.

Brazil has become a critical supplier to China's enormous soybean market. That means Chinese purchasing decisions directly affect the competitive position of U.S. and Brazilian agricultural exporters.

If China continues buying large volumes from Brazil while maintaining tariffs on U.S. soybeans, Brazilian exporters could retain an important advantage.

For commodity markets, this can influence shipping patterns, regional premiums and the flow of agricultural commodities between North America, South America and Asia.

It also demonstrates why tariff announcements cannot always be interpreted simply as "trade tensions are easing." The details of which products receive relief can be just as important as the headline value of the agreement.

What It Means for China

For Chinese buyers, the tariff reductions could lower the cost of sourcing several agricultural commodities from the United States.

That could give Chinese importers more flexibility in choosing between domestic production, U.S. supplies and alternative foreign exporters.

For soybean processors, however, the situation remains more complicated.

China's crushers buy soybeans primarily to produce soybean meal and soybean oil. Higher input costs can squeeze processing margins unless those costs can be passed through to downstream buyers.

Keeping the additional tariff on U.S. soybeans therefore preserves an important cost disadvantage for U.S. shipments, even while Beijing reduces tariffs on related products such as soymeal and soyoil.

Why Global Commodity Markets Are Watching

The development matters beyond the U.S. and China because the two countries account for a major share of global agricultural trade.

Soybeans are particularly sensitive because China represents such a large source of global import demand. Any significant change in Chinese purchasing patterns can affect international soybean prices, shipping demand and the relative competitiveness of exporters.

The immediate message from Beijing is therefore mixed.

On one hand, tariff reductions across a large group of agricultural products suggest that the U.S.-China trade relationship is becoming less restrictive in selected areas.

On the other hand, leaving soybeans outside the tariff cuts indicates that important disagreements remain unresolved.

What Investors Should Watch Next

Investors tracking agricultural commodities and companies exposed to global trade should focus on several developments.

First, watch actual Chinese purchases rather than tariff announcements alone. Lower tariffs matter only if they translate into increased trade volumes.

Second, monitor U.S. soybean shipments. A sustained increase in Chinese purchases could indicate that state-backed buying is overcoming the tariff disadvantage.

Third, watch Brazilian export flows. Continued strong Chinese demand for Brazilian soybeans would suggest that the supply shift toward South America remains entrenched.

Fourth, follow the next U.S.-China trade negotiations. Soybeans could become an important issue in future discussions because of their economic significance to both sides.

Finally, watch agricultural commodity prices. Changes in Chinese demand can affect global prices, margins for processors and revenues across the agricultural supply chain.

The Bigger Picture for U.S.-China Trade

The latest announcement represents a partial easing of trade restrictions rather than a complete resolution of the agricultural dispute.

China is cutting tariffs on a broad selection of U.S. farm products, creating greater market access for American producers. But soybeans — one of the most strategically important agricultural commodities traded between the two countries — remain subject to an additional 10% tariff.

That distinction is important for investors. The headline points toward improving trade relations, but the product-level details show that significant areas of friction remain.

The next key signal will be whether the two countries move closer to resolving the soybean issue and whether announced tariff reductions translate into sustained increases in actual U.S. agricultural exports.

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This article is for informational and educational purposes only and should not be considered investment advice.