Soybean futures are taking it on the chin again Friday after China confirmed it will indeed hit back after US President Donald Trump announced new tariffs on a host of countries on Wednesday.
An announcement from China’s State Council Tariff Commission said Beijing will slap a 34% tariff on all imported goods originating from the US effective April 10. Soybean futures, which lost between 18-20 cents/bu on Thursday on fears of global retaliation against Trump tariffs, were trading down a further 30-31 cents as of about 10 am ET.
As can be seen on the futures chart below, the May soybean contract is now trading at its lowest since mid-December 2024.
The new Chinese levy matches the 34% tariff rate that Trump announced on imports of Chinese goods on Wednesday. It will be on top of the import duties China already placed on some American agricultural goods last month, including 10% on soybeans.
Corn and wheat futures were also trading lower today, although the losses were more modest, given China has not been a major importer of either commodity from the US this year. Soybeans, however, are a different story. The US exports about 40% of its annual soybean production and China is the biggest buyer.
"It is like shutting down all US agricultural imports. We are not sure if any imports will be viable with 34% duty," a Singapore-based trader at an international trading company which sells grains and oilseeds to China, told Reuters today.
According to the USDA's economic research service, the US-China trade war during Trump’s first term as president cost nearly $26 billion in agricultural export losses from 2018 through 2019. Soybean futures briefly sank near $8 and averaged just over $9 during the 2018-19 period.
Since the first trade war, China has been switching more its buying of soybeans and other agricultural goods to Brazil. That trend is now likely to accelerate, which may ultimately result in permanently lost market share for US-origin crops.
May soybeans: Source – Barchart
