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Tariff Is Trump's Favorite Word, But for Soybean Farmers, It Spells Trouble

Strategic Insights

— 2 min read

Champaign, IL – President Donald Trump's recent announcement of a 90-day pause on tariff increases for most countries, except for China, has sparked concerns among soybean farmers, who rely heavily on international buyers to keep commodity prices stable and local economies afloat. According to an Investigate Midwest analysis of USDA data, the U.S. exported more than 40% of its soybean production in 2024, with China accounting for more than two-fifths of those exports.

The U.S. has consistently been a major supplier of soybeans to China, which accounts for 60% of all globally traded soybeans. The Chinese government has suspended soybean imports from three U.S. companies in retaliation to Trump's tariff hikes, which have reached 125% this week. In response, the Chinese government has imposed an 84% tariff on U.S. goods. The economic consequences of this trade war are falling squarely on U.S. farms.

Key Takeaways:

  • Over 40% of the U.S. soybean production is exported, with China accounting for more than two-fifths of those exports.
  • The U.S. has consistently been a major supplier of soybeans to China, which accounts for 60% of all globally traded soybeans.
  • The Chinese government has suspended soybean imports from three U.S. companies in retaliation to Trump's tariff hikes, which have reached 125% this week.
  • The economic consequences of this trade war are falling squarely on U.S. farms, with nearly 60% of North Dakota's soybean exports potentially falling if China imposes a 20% retaliatory tariff.
  • Soybean exports support approximately 231,400 jobs across the country, while soybean meal exports contribute another 41,400 jobs.
  • The American Soybean Association has called for a swift shift in strategy, advocating for new market access opportunities for U.S. soy and other U.S. products in affected markets.
  • U.S. farmers are facing a hard truth: there is no domestic substitute for China, especially when it comes to soybeans.
  • Switching costs for soybean farmers are significant, with many states lacking the soil conditions to easily transition to other crops.
  • Brazil has become a major player in the global soybean market, accounting for 71% of China's soybean imports by 2024, up from 46% in 2016.
  • Brazil's rise to become China's leading soybean exporter didn't happen overnight, driven by favorable climate conditions, strong international demand, and significant technological adoption.
  • The new tariff war places U.S. soybean producers in a far more difficult position than during the first trade war in 2018, largely due to higher production costs and razor-thin profit margins.

Statistics:

  • The U.S. exported more than 40% of its soybean production in 2024.
  • China accounted for more than two-fifths of U.S. soybean exports in 2024.
  • Brazil accounted for 71% of China's soybean imports by 2024, up from 46% in 2016.
  • Soybean exports support approximately 231,400 jobs across the country.
  • Soybean meal exports contribute another 41,400 jobs.
  • A 20% retaliatory tariff by China could lead to a nearly 60% fall in North Dakota's soybean exports.
  • Brazil's soybean production is projected to reach a record 6.15 billion bushels this season, a 13% increase from the previous year.
  • Brazil's soybean exports are projected to reach 3.9 billion bushels this year, up from 3.6 billion in 2024.

Sources:

  • Investigate Midwest analysis of USDA data
  • The Wall Street Journal
  • American Soybean Association
  • University of North Dakota study
  • National Supply Company (Conab) report
  • farmdoc team report
  • Institute for Nonprofit News (INN)
  • Investigatemidwest.org
  • https://inn.org/
  • https://www.farmdoc.uiuc.edu/

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