Soybeans, which are the No. 5 cash crop in receipts for North Carolina, have recently been caught in the crosshairs of a trade war between President Donald J. Trump and China.
On Aug. 10, Trump encouraged China to increase its imports of US soybeans.
“China is worried about its shortage of soybeans. Our great farmers produce the most robust soybeans,” wrote Trump in a Truth Social post. “I hope China will quickly quadruple its soybean orders. This is also a way of substantially reducing China’s Trade Deficit with the USA. Rapid service will be provided. Thank you President XI.”
In response to Trump’s tariffs on China’s imports of US goods, China has been boycotting US soybeans since late May, according to the New York Times (NYT).
As the No. 1 buyer of US soybeans, China’s cuts dramatically impacted the agricultural industry of North Carolina. China accounts for 48% of US soybean exports. In 2022, North Carolina exported $446 million in soybeans, according to the Office of the US Trade Representative.
“(…) due to ongoing tariff retaliation, our longstanding customers in China have and will continue to turn to our competitors in South America to meet their demand, a demand Brazil can meet due to significantly increased production since the previous trade war with China,” wrote the American Soybean Association (ASA), in an Aug. 19 letter to Trump.
“Unfortunately for our soybean growers, China has contracted with Brazil to meet future months’ needs to avoid purchasing any soybeans from the United States,” the letter continued. “U.S. soybeans currently face a duty 20% higher than soybeans from South America due to Chinese retaliatory tariffs. That puts our farmers at an untimely competitive disadvantage. China has not purchased any U.S. soybeans for the months ahead as we quickly approach harvest. The further into the autumn we get without reaching an agreement with China on soybeans, the worse the impacts will be on U.S. soybean farmers.”
Charles Hall, executive director of the North Carolina Soybean Producers Association, an affiliate of the ASA, supports the letter to President Trump.
“Currently, we’re in a 90-day extension of the tariff truce that President Trump granted,” Hall told the Carolina Journal. “China has not yet placed a single order for new crop soybeans, which will be abundant when harvested starting this month. Our national industry asked the president and the key trade negotiators to prioritize a deal for US soybeans, just like they do for airplanes and computer chips.”
According to the USDA, approximately 1.61 million acres of soybeans were harvested in North Carolina in 2024. In 2023, approximately 1.63 million acres of soybeans were harvested in North Carolina, down from 1.68 million in 2022, according to a report from the USDA. Soybeans account for about 5.7% of farm cash receipts for North Carolina in 2023, according to a USDA report.
“US soybean farmers lost market share to Brazil because of the 2018 trade war with China,” continued Hall. “That was unfortunate, as Brazil was able to expand soybean production onto virgin land, while we conserve our existing farmland. Brazil has retained a competitive advantage in China. Brazil is now the subject of a US Section 301 investigation — Sec. 301 is the provision of the Trade Act of 1974 that grants USTR authority to take action to enforce US trade rights. The core complaint is that virgin land illegally converted into soybean production provides an unfair advantage, allowing Brazil to undercut American soybean prices.”
This is not the first time soybeans have been caught in the spotlight during this year’s ongoing trade war. Earlier this year, China significantly cut back on its imports of American soybeans in response to Trump’s tariffs. Soybeans dropped substantially from 72,000 tons the week of April 10 to only 1,800 tons the week of April 24, reported one news source. Earlier this month, President Donald Trump raised the tariff on Chinese goods to 84% and later to 145%. This sparked a retaliation, with China increasing the tariff on US exports to 125%.