China to cut tariffs on US farm goods, but list excludes soya beans

Published Updated
0
A load of soya beans is dumped into an elevator hopper during harvest season at Deerfield AG Services grain elevator facility in Massillon, Ohio, US on October 7, 2021. —Reuters/File
A load of soya beans is dumped into an elevator hopper during harvest season at Deerfield AG Services grain elevator facility in Massillon, Ohio, US on October 7, 2021. —Reuters/File

China is set to cut tariffs on a broad range of US agricultural goods, from corn and wheat to meat and dairy, but top import item soybeans were excluded from a tariff-reduction list jointly issued by China’s commerce ministry and the White House.

Markets have been waiting for news on Chinese tariff cuts on US farm goods following last week’s Washington summit of leaders Xi Jinping and Donald Trump.

The agricultural tariff cuts are part of the $60 billion package of reciprocal tariff cuts negotiated by the Board of Trade and unveiled for the first time on Monday.

The list covers sorghum, vegetable oils and meals, including soya oil and soya meal, along with meat, dairy products and other items.

While the proposal identifies the covered products, it does not specify when the tariff cuts will take effect.

More than 90 per cent of the covered products will be exempt from all additional tariffs imposed on each other and will instead be subject to most-favoured-nation tariff rates, the commerce ministry said in a statement.

US soybeans, however, still face an additional tariff of 10pc, which traders have warned is too high for private crushers to absorb, even as Chinese state buyers have stepped up purchases.

“Despite the soybean being a non-sensitive item in trade, the political significance of China’s soybean purchase is enormous and carries major political implications,” said Feng Chucheng, founder and partner at Hutong Research.

Keeping soya beans on a separate track gives Beijing leverage in its dealings with Washington, especially ahead of the US midterm elections, Feng added.

Chinese state-run agricultural companies Sinograin and COFCO have bought more than 12 million metric tons of US soya beans, nearly half the 25 million the White House has said Beijing committed to buying annually through 2028.

Trade in the agricultural and related products on Monday’s list stood at about $17 billion in 2024, roughly matching China’s reported purchase commitment, excluding soya beans, according to Reuters calculations.

In May, the White House said Beijing had agreed to buy that volume annually through 2028, but China has yet to confirm any target for such purchases.

State-run companies will continue to buy US soya beans and the tariff cuts on other goods will help China meet the $17 billion commitment, said a trader based in Asia with an international company that sells soya beans to China who spoke on condition of anonymity.

Without tariffs, the landed cost for both US and Brazilian beans is roughly $595 per ton, although Brazilian soya beans are generally preferred for their higher oil and protein content, according to traders. At those prices, Chinese private crushers are running at negative margins.

The most-active soya bean contract on the Chicago Board of Trade (CBOT) was trading down 1.38pc at $13-3/4 per bushel as of 0709 GMT.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Kashmir unresolved
Updated 30 Sep, 2026

Kashmir unresolved

The just solution lies in India addressing the issue through a trilateral dialogue involving the legitimate representatives of the Kashmiri people and Pakistan.
Water shortage
30 Sep, 2026

Water shortage

THAT the country is entering the Rabi season with an anticipated water shortage of nearly 25pc, the lowest carryover...
Young hearts
30 Sep, 2026

Young hearts

THE observance may have passed, but the message of World Heart Day should not fade with it. The occasion is a useful...
Terror and politics
Updated 29 Sep, 2026

Terror and politics

There is an urgent need to tone down the rhetoric and tackle terrorism as a collective challenge for both the affected provinces and the federation.
Watching the glaciers
29 Sep, 2026

Watching the glaciers

THE latest signs from Pakistan’s mountains are worrying. Suparco says the number of unfrozen glacial lakes it...
Dangerous agenda
29 Sep, 2026

Dangerous agenda

AS the world remains fixated on the US-Iran conflict, elsewhere in the Middle East, Israel is consolidating its grip...