China tariffs drop for now, soybean market effects unclear

WASHINGTON — A major temporary reduction in tariffs between the United States and China announced early in the morning May 12 came as welcome news to soybean producers, already concerned about internationally troubling markets before the import taxes took effect.

Some ag industry voices had raised the alarm in recent weeks, worried tariff disputes with China could take a major buyer of the commodity off the table for American producers even as other factors drive prices down. It’s been a rough year for farmers, with the price of soybeans declining $2 per bushel from May of 2024 to ‘25, according to the Iowa Soybean Association.

A report from the group in August attributed the start of the downturn to a record-setting number of soybean acres planted in the U.S., partially due to wet conditions delaying the planting window in Iowa and other Midwestern states. Federal officials revised their harvest calculations in February, making 2024 only the second-most productive year for soybeans on record, but industry leaders said the adjustment wasn’t enough to push prices up from their four-year low.

That’s coupled with a record-high seasonal production forecast in Brazil based on figures published by the country’s National Supply Company, suggesting a flooded market that could put U.S. producers at a disadvantage amid international tariff disputes.

“When accounting for basis, soybean prices remain $1.50-$2 per bushel below the cost of production as U.S. farmers plant the 2025 crop,” wrote Iowa Soybean Association Chief Officer of Brand Management and Engagement Aaron Putze in a report May 1. “Unlike 2018 when President Donald Trump and Chinese President Xi Jinping first engaged in tit-for-tat tariffs, Brazil and Argentina are coming off nearly ideal growing seasons.”

The deal announced Monday morning doesn’t mean everything’s in the clear for growers. While Chinese tariffs on U.S. goods were reduced from 125% to 10% according to reporting by Reuters, the deal expires shortly before harvest time which typically begins in September.

For soybeans, especially, problems are expected if trade hostility resumes in the fall. John Greiner, an ag commodities broker at Kat’s Grain in Washington, said China was a major buyer of U.S. grain outputs.

“Well, 40% of our soybean exports go to China, (and it) takes in roughly 700 million bushels of our U.S. soybeans a year,” Greiner said in an interview with The Union in early April, a day after Trump announced a wave of tariffs on virtually every international imports. “If you go back to the 2018 tariffs, or trade war, whatever you want to call it, China pretty much shut off U.S. soybean imports. So it’s very concerning what type of retaliation we may or may not see.”

Escalations to the trade dispute followed in the intervening months, with China setting a nearly 115% tariff on American soybeans a week after Trump’s proclaimed “Liberation Day,” and later reports suggesting the nation had cut off nearly all grain imports from the U.S. before Monday’s trade deal.

Despite the tumultuous political scene, Iowa farmers are gearing up to weather the storm. Producers point out that anything can happen between now and harvest, and noted that soybean prices are up slightly from six months ago despite tariff and oversupply concerns.

Lindsay Greiner, a Keota farmer and former Iowa Soybean Association president, said the trade policy had little effect on his planting decisions in 2025, which were made months before President Trump announced the import taxes. Like other producers, he’ll have to wait and see what happens between now and harvest.

“There’s a little bit of concern, but … I think there’s maybe hope that trade deals are going to get done in the next few months,” Greiner said in an interview Friday, a few days before the latest 90-day suspension of tariffs was announced. “But if they don’t, and we raise a big bean crop, then we’re for sure going to see prices lower than they are today.”

Comments: Kalen.McCain@southeastiowaunion.com