US President Donald Trump announced that he will meet with Chinese President Xi Jinping in the coming weeks over Beijing’s refusal of buying American soybeans. This is a major escalation of tensions within a trade dispute which has been affecting US farmers for years.
This announcement is the latest in a series of developments that have strained the economic relationship between two of the largest economies on the planet.
Trade tensions over soybeans
Under pressure from Republican legislators in farm states Trump said that soybeans will be a major topic when he met Xi during the upcoming Asia-Pacific Economic Cooperation summit (APEC).
Trump wrote on Twitter: “Soybean Farmers in our Country suffer because China does not buy soybeans for reasons of negotiating only.”
Joe Biden was accused by the president of not enforcing provisions in Phase One of Trump’s trade agreement, signed during his first term. These included a requirement that Beijing purchase large quantities of US agricultural products.
He reiterated that he would use the tariff revenue to finance a new package of aid for farmers. However, details are still unclear.
The soybean futures market responded strongly to these comments. They rose as high as 1.9% intraday – the largest jump since August 21 – before reducing gains.
China holds off on purchasing
China, as the largest soybean purchaser in the world, exerts a significant influence on global agricultural markets.
Beijing is reviving a tactic that was used in the Trump era’s first trade war, by delaying US purchases while negotiations are ongoing.
Data from the US Department of Agriculture shows that China has not yet booked any U.S. soya bean cargos as of September 18th, weeks into the marketing year. This is a record since 1999.
China imported more than 12 billion dollars worth of US soya beans last year. This was one fifth of the value of American exports.
US-China are operating in a temporary trade detente which has temporarily reduced tariffs and restrictions. However, this is due to expire on November.
Both leaders met earlier in the month, setting up discussions for APEC where agriculture trade will be a major agenda item.
Trump faces political and legal risk
Trump’s plan of channeling tariff revenue into farm relief may face major obstacles.
The lower courts ruled that his emergency powers were unlawful and he was not allowed to use them to implement sweeping tariffs. If the Supreme Court upholds these decisions, the US Government may be forced to refund billions of US dollars.
And, Republican Senators met this week with US Ambassador in China David Perdue and expressed their skepticism about Beijing’s intention to resume purchasing American agricultural products.
The lawmakers warned of the temporary nature of stopgap bailouts.
Political stakes are very high. The farmers, who were Trump’s key vote bloc in 2024 have suffered from shrinking safety net programs and declining export markets throughout his second term.
Republicans are vulnerable to the prolonged disruption, especially in agricultural areas.
The outcome of Trump’s meeting with Xi could be far-reaching, not just for the soybean trade globally but also his domestic political position.
This post Trump vows to confront Xi about China’s halt on US soybean purchases first appeared on The ICD
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