Behind the Headlines: China’s Soybean Reality After the Trump–Xi Meeting

The much-anticipated Trump–Xi meeting on Thursday was as much political theatre as trade diplomacy, “a 12 out of 10,” in Trump’s own words, but its supposed outcome has left markets guessing more than celebrating. U.S. officials claimed that China would buy a “tremendous” 12 million tonnes (Mt) of U.S. soybeans before January, followed by 25 Mt annually over the next three years. Beijing has not confirmed any such commitments, stating only that it will “resume soybean purchasing.” So far, that has translated into three COFCO cargoes, reportedly government-directed purchases for state reserves rather than commercial demand.

In reality, China has little near-term need for large U.S. soybean imports. Domestic inventories, around 43 Mt, are sufficient to cover crush demand through November, leaving perhaps a modest 5 Mt gap through early 2025. Meanwhile, Argentina and Brazil have together supplied nearly all of China’s soybean requirements in MY 24/25 (~78 Mt of the 108 Mt imported). With another bumper Brazilian crop projected for early 2026, potentially exceeding 155 Mt, China’s reliance on South American beans looks set to persist.

Commercially, U.S. soybeans remain at a disadvantage. The 23% Chinese tariff remains in place, and there have been no announcements of any tariff suspensions or revisions. Brazilian beans carry higher protein content, and with a narrower US–Brazil FOB price gap of $15/t (down from $40/t earlier in October), factoring in these duties renders U.S. cargoes uncompetitive. Moreover, negative crush margins in China and the expansion of U.S. domestic crushing capacity (+9.2 Mt between 2023 and 2025) further constrain the potential for export recovery. Until there is clarity on any tariff suspension or trade policy adjustment, there is little commercial incentive for Chinese crushers to turn to U.S. supply.

For dry bulk shipping, the implications remain conditional. If China were to follow through on the proposed 12 Mt purchase before January, the U.S. would need to ship soybeans at an average rate of around 1.33 Mt per week over the next nine weeks, close to the upper end of historical performance (the five-year average is 1.28 Mt, with a peak of just over 2.0 Mt in November 2020). To sustain such a pace would likely tighten Panamax availability in the North Atlantic, where the fleet currently stands at 437 vessels, down from 476 a year ago. Most U.S. soybean exports (roughly 80%) typically move through the Gulf, although persistently low Mississippi water levels continue to drive up barge rates and could limit throughput.

In that optimistic scenario, short-term Panamax demand could strengthen, supporting a brief spike in Atlantic basin rates and volatility. However, this outcome still depends on formal confirmation from Beijing, the signing of an official agreement, and crucially adjustments to China’s existing tariffs. Without those, the current headlines risk remaining just that: headlines, not a turning point for trade or freight.