This article first appeared on GuruFocus.
China’s soybean strategy has re-emerged as a pressure point in its trade relationship with the US. For the first time since at least 1999, Beijing has held back from purchasing any American soybeans at the start of the export season, according to USDA data. This move echoes the tactics seen during the first trade war under President Donald Trump, when agriculture was deployed as leverage. Last year, US soybeans accounted for more than $12 billion of China’s imports, representing a significant share of American farmers’ export earnings. The absence of fresh Chinese demand this September has left growers facing a glut of supply and prices near multi-year lows.
Analysts suggest this could be part of a well-planned strategy. China’s crushers and feed producers, who rely heavily on soymeal and soyoil, have already secured ample stocks from Brazil, in some cases doubling inventories. This gives Beijing breathing room to avoid US purchases until at least early 2026. The approach aligns with its broader effort to diversify away from American commodities, with imports of corn, wheat, and sorghum also reduced. At the same time, Beijing has increased pressure on US firms by launching an antitrust probe into Nvidia (NASDAQ:NVDA), while making small conciliatory gestures such as resuming US oil imports and shelving an investigation into Google’s (NASDAQ:GOOG) Android. Market watchers note that soybean futures in Chicago have been volatile, reflecting the uncertainty over whether Beijing could step back into the market.
For the Trump administration, the pressure from America’s farm belt is intensifying. Growers, a politically critical bloc, have warned that tariffs could push them toward a financial precipice, urging Washington to secure concessions from Beijing. Trump has publicly called for China to ramp up orders, with agriculture expected to dominate the trade agenda in the weeks ahead. While near-term breakthroughs may be unlikely, the prospect of a larger face-to-face negotiation later this year leaves investors watching closely. Any eventual deal could reshape the trajectory of soybean flows, but for now, the market is adjusting to a reality where China is willing to pay premiums elsewhere to keep the US on edge.