Inside the US-China Soybean War: Export Losses, Farmer Struggles, and What’s Next

The soybean, a small legume roughly the size of a pea, might not seem like the star of a global economic drama. Yet, this unassuming crop is at the heart of a escalating trade war between the United States and China, two of the world’s largest economies. Valued for its high protein and fat content, soybeans are a cornerstone of global agriculture, feeding livestock, filling grocery shelves as tofu and soy milk, and serving as one of the most lucrative commodities traded worldwide. However, with massive tariffs now in place between the US and China, the soybean market is facing unprecedented disruption. American farmers are bracing for losses, Chinese buyers are looking elsewhere, and countries like Brazil are poised to capitalize.

The Soybean’s Starring Role in US-China Trade

Soybeans are a big deal in US-China trade, and the numbers tell the story. In 2024, the US exported over 27 million metric tons of soybeans to China, valued at $12.8 billion. That’s roughly 9 cents of every dollar the US earned from goods sold to China, making soybeans the single most valuable product in this trade relationship. More than half of all US soybean exports went to China last year, feeding the country’s massive livestock industry, which supplies pork, chicken, and other meats to its 1.4 billion people.

But this relationship is now under strain. In recent weeks, the US imposed a staggering 145 percent tariff on Chinese imports, prompting China to retaliate with a 135 percent tariff on American soybeans. These tariffs have effectively jacked up the price of US soybeans for Chinese buyers, threatening to choke off demand. For American farmers, who rely heavily on China as their biggest customer, this is a potential disaster. For China, it’s a challenge to secure enough soybeans to keep its livestock fed. And for the global soybean market, it’s a seismic shift that could reshape trade flows for years to come.

The Pain for American Farmers

For American soybean farmers, the trade war is more than a headline. It’s a direct threat to their livelihoods.

Soybean farmers are facing a tough choice. With planting season approaching, they’ve already invested in seeds, fertilizer, and equipment. Switching to another crop, like corn or wheat, isn’t a simple pivot. Many farmers rotate soybeans with corn to maintain soil health, and they can’t just overhaul their operations overnight. If China stops buying, the price of soybeans could plummet, leaving farmers with crops they can’t sell at a profit.

The timing couldn’t be worse. After harvest, farmers typically sell their soybeans to local dairies, grain elevators, or processing plants that turn the beans into oil and meal. Some store their crop, hoping for better prices later. But with tariffs driving Chinese buyers away, the market is uncertain.

This isn’t the first time American farmers have felt the sting of a US-China trade war. During President Trump’s first administration, similar tariffs led China to slash its US soybean imports by 14 percent between 2017 and 2024, dropping from 31.7 million metric tons to 27 million. To cushion the blow, the US government rolled out a $23 billion bailout for farmers. While it helped, farmers said it didn’t fully compensate for lost markets. Now, with even higher tariffs in play, the Trump administration is considering another bailout. But there’s no guarantee it will cover the losses, and farmers fear the long-term damage of losing China as a buyer.

Brazil Steps into the Spotlight

While American farmers worry, Brazil is ready to seize the moment. Brazil is already the world’s largest soybean exporter, producing 40 percent of the global supply compared to the US’s 28 percent. Together with Argentina, South America accounts for 52 percent of the world’s soybeans. China is Brazil’s biggest customer, importing 72.5 million metric tons in 2024, a 35 percent increase since 2017.

The new tariffs are a golden opportunity for Brazilian farmers. “Once they can’t get it from the US, they’ll need to take more from Brazil,” says Neusa Lopes, a top executive at Girassol Agrícola, a major soybean producer in Brazil’s Mato Grosso state. Lopes’s company farms over 170,000 acres, an area nearly the size of New York City. She’s already seeing prices rise, with a 130-pound sack of soybeans now fetching $21, up 10 percent from last month.

However, Brazilian farmers face their own challenges. The harvest season is winding down, and most of their crop has already been sold. Those who still have soybeans are either cashing in now or holding out, betting that the trade war will drag on and push prices even higher. André Nassar, president of the Brazilian Association of Vegetable Oil Producers, notes that the price surge is coming too late for many farmers who sold earlier. Still, Brazil’s position as China’s go-to supplier is stronger than ever.

China has been laying the groundwork for this shift for years. Over the past decade, Chinese companies have invested heavily in Brazilian infrastructure, building warehouses, railroads, and ports to streamline soybean exports. This year, Cofco, a Chinese state-owned food giant, opened a $500 million terminal at the port of Santos, Latin America’s largest. These investments make it easier for China to pivot away from the US and lean on Brazil, especially during a trade war.

A Broader Global Impact

The soybean shakeup isn’t just about the US, China, and Brazil. Other countries could also feel the ripple effects. For instance, nations like South Korea, Taiwan, and the European Union might step in to buy more US soybeans. These purchases could serve dual purposes: meeting domestic needs and currying favor with the US during trade negotiations. India, Egypt, and Mexico are also potential markets, though they’re unlikely to replace China’s massive demand anytime soon.

Meanwhile, China is pushing for greater self-sufficiency in agriculture. A recent Chinese agricultural ministry report outlined plans to reduce reliance on foreign soybeans over the next decade. This could mean expanding domestic production or diversifying suppliers, further sidelining the US. For now, though, China’s livestock industry depends on imports, and Brazil is the most immediate solution.

The trade war’s impact extends beyond soybeans. The broader decoupling of the US and Chinese economies could disrupt global supply chains, from lithium-ion batteries to electronics. Brazil itself faces risks. While the soybean boom is a short-term win, sustained global trade tensions could dampen economic activity, including in China, Brazil’s largest trading partner. Brazil’s weakened currency and high interest rates also make it vulnerable to external shocks. As Valentina Sader, a deputy director at the Atlantic Council, points out, Brazil must balance its ties with China and the US to avoid overreliance on one market.

Looking Ahead: Can American Farmers Adapt?

For American soybean farmers, the future is uncertain but not hopeless. Organizations like the US Soybean Export Council and the American Soybean Association are working to open new markets in countries like India and Mexico. Domestic solutions are also in play. New soybean processing plants are coming online in the US, turning beans into oil, meal, and even biofuels. Researchers are exploring non-feed uses for soybeans, such as industrial applications, which could diversify demand.

However, these are long-term strategies. Building new markets or infrastructure takes years, and farmers need solutions now. In the meantime, they’re stuck planting and hoping for the best. The last trade war showed that government bailouts can help, but they’re a bandage, not a cure. If China permanently shifts to Brazil and other suppliers, American farmers could lose their largest export market for good.

The Bigger Picture

The soybean saga is a microcosm of the US-China trade war’s broader stakes. Tariffs are reshaping global markets, creating winners and losers in unexpected places. American farmers are caught in the crossfire, facing immediate pain with no easy way out. Brazil, on the other hand, is poised to profit, leveraging its agricultural might and China’s investments to fill the gap. Yet, even Brazil faces risks in a world of escalating trade tensions.

For consumers, the impact might not be immediate, but it’s coming. Higher soybean prices could ripple through the food chain, raising the cost of meat, dairy, and processed foods. For the global economy, the trade war signals a shift toward fragmentation, where supply chains realign based on politics as much as economics.

The humble soybean, once a quiet player in global trade, is now a symbol of this turbulent era. As the US and China dig in, the fate of farmers, industries, and markets hangs in the balance. Whether the trade war ends with a truce or a permanent rift, one thing is clear: the soybean’s journey is far from over.