China to cut tariffs on US agricultural imports but exclude soybeans
- agricultural imports including corn, wheat, meat, and dairy as part of a $60 billion reciprocal tariff-reduction package negotiated by the Board of Trade.
- The announcement follows a Washington summit between Chinese President Xi Jinping and U.S.
- The list of goods eligible for reduced tariffs includes sorghum, meat, dairy products, and vegetable oils and meals.
China will reduce tariffs on a wide range of U.S. agricultural imports including corn, wheat, meat, and dairy as part of a $60 billion reciprocal tariff-reduction package negotiated by the Board of Trade.
The announcement follows a Washington summit between Chinese President Xi Jinping and U.S. President Donald Trump. According to a statement from China’s commerce ministry, more than 90% of the covered products will be exempt from additional tariffs and will instead be subject to most-favoured-nation tariff rates.
Agricultural Products Covered by Tariff Cuts
The list of goods eligible for reduced tariffs includes sorghum, meat, dairy products, and vegetable oils and meals. Specifically, the cuts apply to soya oil and soya meal, though the whole soybean remains excluded.
This figure roughly matches the purchase commitment reported by China, excluding soybeans.
While the proposal identifies which products are covered, the commerce ministry has not specified the date these tariff cuts will take effect.
Soybean Exclusion and Political Advantage
The decision to keep soybeans on a separate track maintains a 10pc additional tariff on the crop. Traders have warned that this rate is too high for private crushers to absorb.
Feng Chucheng, founder and partner at Hutong Research, stated that the political significance of soybean purchases is enormous despite the item being non-sensitive in trade.
Feng added that maintaining this separate track gives Beijing an advantage in dealings with Washington, particularly leading up to the U.S. midterm elections.
State Purchase Commitments and Market Impact
Chinese state-run agricultural companies COFCO and Sinograin have purchased more than 12 million metric tons of U.S. soybeans. This amount is nearly half of the 25 million metric tons the White House said Beijing committed to buying annually through 2028.
The White House announced the purchase agreement in May, though China has not confirmed a specific target for those purchases. An Asia-based trader with an international soybean company, speaking on condition of anonymity, said state-run companies will continue buying U.S. soybeans and that tariff cuts on other goods will help China meet its $17 billion commitment.
Cost Pressures for Chinese Private Crushers
Traders report that the landed cost for both Brazilian and U.S. beans is roughly $595 per ton without tariffs. Brazilian soybeans are generally preferred by buyers due to higher protein and oil content.
At current price levels and tariff structures, Chinese private crushers are operating at negative margins.