In August 2025, U.S.-China trade negotiations resumed in Washington, with China’s Vice Minister of Commerce Li Chenggang and U.S. Trade Representative Jamison Greer engaging in intense discussions over soybean procurement, rare earth supplies, and semiconductor export restrictions. This round of talks coincided with the approaching U.S. soybean harvest season, yet China had not yet placed large-scale procurement orders, raising concerns among American farmers about potential inventory gluts and price depreciation.

Agricultural trade serves as both an economic conduit and a strategic lever to address trade imbalances within bilateral trade agreements, while also influencing global agricultural supply-demand dynamics and price trends. Since the Phase One trade agreement in 2020, agriculture has remained central to negotiations—particularly amid the 2025 tariff moratorium and ongoing procurement commitments.

Strategic Importance of Agricultural Trade

U.S.-China agricultural trade is fundamentally underpinned by the structural complementarity of the two economies.

As the world’s largest agricultural importer, China recorded over $200 billion in import value in 2024, meeting approximately 80% of its demand for soybeans, pork, and cotton through imports. The United States, as the top agricultural exporter, shipped $29.25 billion worth of farm goods to China in 2024, accounting for 17% of its total agricultural exports. This commercial linkage serves as a critical mechanism for stabilizing both bilateral economic relations and global supply-demand balances, directly influencing worldwide prices and supply chain dynamics.

In 2024, the U.S. trade deficit with China remained elevated, making agricultural exports a key channel for mitigating this imbalance. Under the 2020 Phase One agreement, China committed to purchase an additional $200 billion of U.S. goods over two years, including roughly $40 billion in agricultural products. Although China fulfilled only about 60% of its agricultural procurement targets, its pledges on high-value items such as soybeans underscored the sector’s strategic role. In May 2025, China slashed tariffs on U.S. imports from 12.5% to 10%, effectively reducing the levy on soybeans to 23% and enhancing the competitiveness of American products. Nevertheless, competition from zero-trade-tariff rivals like Brazil continues to exert pressure, necessitating further barrier reductions in ongoing negotiations to secure market share.

Moreover, China’s substantial demand for agricultural products drives its import strategy. In 2024, China imported 96 million metric tons of soybeans, representing 60% of global trade, with the U.S. supplying 25% of that volume. Pork, corn, and wheat also constitute major import categories. The U.S.-China trade agreement, by scaling up purchases of American farm goods, has helped bridge China’s supply-demand gap while providing a stable market for U.S. producers. In 2022, U.S. agricultural exports to China reached $40 billion, nearing agreed-upon commitment levels and highlighting the mutual benefits of agricultural trade. Consistent procurement supplies Chinese consumers with high-quality products and injects vitality into rural economies in the United States.

Critically, volatility in U.S.-China agricultural trade directly impacts global commodity prices and supply chains. During the 2018–2019 trade war, U.S. soybean exports to China plummeted, contributing to a global soybean surplus that drove down worldwide prices by 15% and severely affected farmers in Brazil, Argentina, and other producing nations.

Following preliminary consensus during the Stockholm talks in July 2025 to extend the tariff suspension, the two sides issued a joint statement on August 12 after meetings in Washington, formally extending the tariff moratorium until November 30, 2025. This measure offers a crucial window for trade stability. A successful agricultural agreement would help reduce supply-demand uncertainties, stabilize global price fluctuations, and create a predictable market environment for exporting countries such as Brazil and Argentina.

Battleground of Trade Negotiations

Soybeans represent the cornerstone of U.S.-China agricultural trade. In 2024, U.S. soybean exports to China reached $12.8 billion, accounting for nearly half of all American soybean exports. However, trade frictions have caused the U.S. share of the Chinese market to decline from 20% in 2016 to 12% in 2024, while Brazil’s share rose to 22%. The dynamics of soybean trade are pivotal to the direction of ongoing negotiations.

China typically purchases U.S. soybeans between September and January, aligning with the U.S. harvest season. As of August 2025, however, China had not yet placed large-scale soybean orders, raising concerns among U.S. farmers about a potential inventory glut and price depreciation. The American Soybean Association estimates that if China continues to favor South American supplies, U.S. exporters could face losses exceeding $5 billion. Soybean futures contract prices on the Chicago Mercantile Exchange have slumped to their lowest level since 2020, reflecting oversupply and weak demand. Should the negotiations secure procurement commitments, it would directly alleviate inventory pressure and help support a price recovery.

Source: CME Group

In April 2025, China announced a policy to reduce the soymeal inclusion rate in animal feed by 10 percentage points by 2030—a move expected to cut annual soybean imports by approximately 10 million metric tons. This volume is equivalent to half of the U.S. soybean exports to China in 2024. The measure is part of China’s broader strategy to reduce dependency on imported food commodities, a effort further reinforced by $15 billion in domestic production subsidies for soybeans in 2024.

This reduction in soymeal usage will not only directly suppress soybean import demand but also further erode the market share of U.S. soybeans. Previous trade tensions already led to a decline in U.S. market presence; compounded by this new policy, the United States risks permanently losing additional market share unless it achieves a breakthrough in bilateral negotiations.

Economic Dilemmas of Farmers

Agricultural tariffs serve as a critical bargaining leverage in U.S.-China negotiations, yet their inherent unpredictability amplifies market risks for farmers. The challenges confronting U.S. farmers in trade with China extend beyond short-term tariff or order fluctuations—they reflect deeper systemic issues involving supply chains, policy orientation, and production costs. The convergence of these factors has led to a erosion of U.S. market share in China that will be difficult to fully reverse in the short term.

During the 2018–2020 trade war, China accelerated its shift toward South American suppliers, with Brazil emerging as the primary beneficiary. By 2024, Brazil’s agricultural exports to China reached $35 billion, surpassing those of the United States. China’s $10 billion investment in Brazilian infrastructure—including ports and railways—has significantly reduced logistics costs. Meanwhile, the effective 23% tariff on U.S. soybeans continues to undermine their price competitiveness. Even if negotiations lead to further tariff reductions, reclaiming the market share held in 2016 would take considerable time and may not be fully achievable.

At the same time, U.S. farmers are grappling with rising costs of inputs such as fertilizer and diesel. According to World Bank data, fertilizer prices increased by an average of 15% in early 2025. These cost pressures, combined with export uncertainties, are severely squeezing profit margins for small and mid-sized farms. For instance, soybean growers in Iowa report that tariff uncertainty is forcing delays in planting decisions—a situation that may lead to reduced acreage and lower yields and revenue.

Furthermore, U.S. producers face intensifying competition from rival exporters. Brazil, Argentina, and Canada continue to expand their market shares in China. Brazil—responsible for 40% of global soybean production in 2024—enjoys significant cost efficiency. China and Brazil have also deepened cooperation under a 2023 agricultural supply chain agreement, strengthening their trade partnership.

The Future Landscape

The 2025 negotiations have exhibited a cautiously optimistic momentum.

The July talks in Stockholm and August discussions in Washington addressed key issues including soybean procurement, rare earth supplies, and semiconductor export restrictions. A joint statement issued on August 12 confirmed the extension of the tariff moratorium until November 30, 2025, establishing a stable environment for further dialogue.

Market expectations indicate that China may commit to purchasing $15–20 billion worth of U.S. agricultural products in 2026—below the 2022 peak of $40 billion but above 2024 levels. Soybean purchases remain a focal point, though they are constrained by China’s growing reliance on South American suppliers. Breakthroughs may also emerge in rare earth and semiconductor negotiations. The U.S., which depends on China for 80% of its rare earth imports, seeks stable access, while China aims to ease restrictions on U.S. chip exports.

Nevertheless, the negotiations continue to face risks. China’s procurement commitments to Brazil and other partners may limit the expansion potential for U.S. agricultural exports. Domestic political pressures in both countries could lead to stalled talks, leaving U.S. farmers vulnerable to inventory gluts and price depreciation. Furthermore, China’s push for self-sufficiency is likely to further constrain import demand, posing long-term challenges for American exporters.

Ripple Effects

The trajectory of U.S.-China agricultural trade holds the potential to reshape the global landscape. In 2024, global soybean prices declined by 8% due to oversupply. A successful outcome in the current negotiations could help stabilize future prices for soybeans and corn. Increased exports from the United States would alleviate global supply pressures, support price levels, and benefit farmers across multiple producing countries.

Conversely, should the talks fail, the resulting buildup of U.S. inventories could further depress global soybean prices. This scenario may allow Brazil to further expand its export share in the Chinese market, altering global trade flows and undermining the competitiveness of other producing regions.

Agricultural trade remains a strategic cornerstone of U.S.-China trade agreements, linking bilateral economic interests with global market stability. The 2025 negotiations present an opportunity to restore U.S. agricultural exports to China. Yet American farmers continue to face persistent challenges including market share erosion, rising cost pressures, and intensifying international competition. The success of the talks will largely depend on tariff reductions, secured purchase commitments, and adaptive strategies to counter China’s increasing self-sufficiency policies.