Why China left US soybeans out of its latest tariff cut list

China's commerce ministry issued a list of products that will get tariff cuts on Monday. It includes corn, wheat, sorghum, vegetable oils and meals, meat, dairy products and other agricultural goods. US soybeans, however, are not on the list.

In Short

• China cuts tariffs on many US farm goods except soybeans
• US soybeans face an extra 10% tariff in China
• Soybean tariff exclusion seen as political leverage

China is cutting tariffs on a wide range of US agricultural products, but one major item has been left out — soybeans, reported Reuters. The move has raised questions about why Beijing has kept the additional tariff on US soybeans even as it eases duties on other farm goods.

China's commerce ministry issued a list of products that will get tariff cuts on Monday. It includes corn, wheat, sorghum, vegetable oils and meals, meat, dairy products and other agricultural goods. US soybeans, however, are not on the list.

China is the world's biggest soybean importer, making its treatment of US soybeans particularly important for the global trade in the crop.

SOYBEANS STILL FACE AN ADDITIONAL 10% TARIFF

US soybeans will continue to face an additional 10% tariff in China. Traders have said this level of tariff is difficult for private crushers to absorb.

At the same time, Chinese state buyers have continued to purchase US soybeans. State-run agricultural companies Sinograin and COFCO have bought more than 12 million metric tonnes of US soybeans.

That is nearly half of the 25 million tonnes the White House has said China committed to buying every year through 2028. China has not confirmed any specific purchase target.

WHY WERE SOYBEANS LEFT OUT?

The exclusion appears to have a strong political angle. Feng Chucheng, founder and partner at Hutong Research, said soybeans may not be a sensitive product in trade, but China's purchases of the crop have major political significance, the report mentioned.

He said soybean purchases are being handled separately from the tariff-cut process. This gives Beijing some leverage in dealing with US actions, particularly ahead of the US midterm elections.

This means soybeans are being treated differently from other farm products despite their importance in US-China agricultural trade.

Meanwhile, the exclusion from the tariff-cut list does not mean China has stopped buying US soybeans.

Chinese state-run companies have continued to make purchases despite the additional tariff. The tariff cuts on other agricultural products could also help China meet the purchase commitment of around $17 billion worth of US farm and related products, according to a trader based in Asia who sells soybeans to China.

Reuters calculations show that trade in the agricultural and related products covered by Monday's list was worth about $17 billion in 2024, excluding soybeans.

SOYBEANS REMAIN A SEPARATE ISSUE

The decision comes after last week's meeting between Chinese President Xi Jinping and US President Donald Trump in Washington, where both sides agreed on steps to reduce trade tensions.

The two countries have also agreed to form a trade council. Its first task will be to discuss a reciprocal tariff cut on $30 billion worth of products.

For now, however, soybeans remain outside China's tariff-reduction list. A trader also said US soybeans are not very competitive on price even if the tariffs were lowered, adding another challenge for US soybean exporters.

- Ends