Tariff story takes new twists
In the recent trade deal announced at the end of October, China agreed to buy 12 million metric tons of soybeans in the last two months of 2025 and 25 million metric tons for 2026-28.
For years, soybeans have been the country’s biggest export to China. China’s absence from the soybean market since May was designed to punish United States farmers, a key constituency for President Donald Trump.
The trade deal was touted by Trump and Treasury Secretary Scott Bessent as vindicating the tariff strategy, whose purpose (among others) was supposed to be to get trade partners to sign deals.
Will China keep its soybean promises? Its soybean purchases are reportedly lagging behind its promises. The Chinese didn’t keep to their commitments during the Biden administration, when it failed to meet its Phase One obligations.
“Tracking will be important,” said Allan Featherstone, head of the department of agricultural economics at Kansas State University.
The real pain point in the deal wasn’t soybeans but rare earths, where China made some welcome but pointedly temporary concessions. China has demonstrated that it has options when it comes to soybeans. It has made big investments in South American port and logistic infrastructure and Brazil has become its largest supplier of soybeans. Meanwhile, the U.S. doesn’t have realistic options to access the rare earths it needs, at least not without investments taking years and costing billions.
It may not be a coincidence that President Trump announced rollbacks on certain tariffs just as the U.S. Supreme Court is considering his entire tariff policy, which has been under heavy fire. Opponents of the tariff policy rushed to point out that Trump’s rollbacks amount to an admission that yes, tariffs do increase prices. Even economists who were more or less neutral about tariffs in general noted that they made little sense on products like coffee and bananas, which the U.S. doesn’t produce itself.
The remarks of the Supreme Court justices during deliberations are being closely watched and parsed. Some commentators seem convinced that Trump’s tariff policy—a linchpin of his entire second term—may not survive judicial review. It’s not out of the realm of possibility that the court may decide that Congress never had the ability under the Constitution to delegate its tariff authority at all. This is a point that longtime U.S. Sen. Chuck Grassley, R-IA, a farmer and a member of the Senate Agriculture Committee, has raised.
The ups and downs of Trump’s tariff moves have provided volatile economic “weather” for ag producers. The tariff story is not over, but it may be moving toward a climax.
David Murray can be reached at [email protected].
