The Trump administration has announced that China has fulfilled its initial commitment to purchase 12 million metric tons of soybeans from the US. However, the future of the trade agreement announced in October remains uncertain as President Donald Trump’s ever-changing trade policy continues to disrupt the deal.
Earlier this month, Trump threatened to impose a 25% tariff on any country that buys from Iran, which would include China. Additionally, he recently threatened to impose a 10% tariff on eight of America’s closest allies in Europe if they continue to oppose his efforts to acquire Greenland. This shifting trade policy has left American farmers, who are still dealing with high production costs, uncertain about the stability of the agreement.
“Those new tariffs — what does that mean for this agreement? Does it throw it out? Is it still binding? That’s sort of the game here now,” said Chad Hart, an agricultural economist at Iowa State University.
Beijing had paused any purchases of US soybeans last summer during its trade war with Washington but agreed to resume buying from American soybean farmers after Trump and Chinese leader Xi Jinping met in South Korea and agreed to a truce. However, the administration’s continued policy changes have raised concerns about the long-term viability of the deal.
Treasury Secretary Scott Benson announced that China has met the purchasing milestone, stating that Beijing remains committed. “He told me that just this week they completed their soybean purchases, and we’re looking forward to next year’s 25 million tons,” Benson said.
Despite this, data from the Department of Agriculture had previously cast doubts on whether China would live up to the agreement, as it was slow to begin purchasing American soybeans, and there is a lag before the purchases show up in the official numbers.
The uncertainty surrounding the trade deal has had a significant impact on American farmers, who are already struggling with the soaring costs of fertilizer, seeds, and labor. While the Trump administration has pledged $12 billion in aid to help US farmers weather the trade war, many feel that the assistance will not solve all their problems.
“Everything is changing — the land rental market, the fertilizer market, the seed market and it’s all pinching the farmer when they go to do their cash flow. The ability to make a decision is tougher now because of all the uncertainty in the market,” said Cory Walters, an associate professor in the University of Nebraska-Lincoln’s Department of Agricultural Economics.
As the trade war continues to evolve, American farmers remain caught in the crosshairs, uncertain about the future of their livelihoods and the stability of the soybean deal with China.
