ISA Newsroom

Agricultural news farmers want to know.

U.S.-China push pause on trade war

Article cover photo
President Donald Trump recently brokered a trade truce with Chinese President Xi Jinping during the G20 summit in Argentina. The resumption of U.S. soybean sales to China is expected. (Photo: Joseph L. Murphy/Iowa Soybean Association)

By Matthew Wilde, ISA senior writer

A cease fire in the U.S.-China trade war on Dec. 1 came at an opportune time for U.S. soybean farmers sitting on a record crop and long-time Chinese customers with dwindling stocks.

Chinese officials this week started the process of buying U.S. soybeans and other products again after the nations agreed to halt trade hostilities and work out their differences, according to published reports. Top White House officials confirmed China agreed to resume purchasing U.S. agricultural products as the two nations negotiate a trade deal.

China placed a 25-percent tariff on U.S. soybeans and other ag products July 6 in response to U.S. duties on its goods. It all but halted soy sales to the country and sent prices tumbling to 10-year lows.

The latest trade developments are a step in the right direction, Iowa Soybean Association (ISA) leaders say. It will hopefully lead to ships full of U.S. soy heading to China soon and better prices.

“This is good news, it’s what we’ve been waiting for,” said ISA President Lindsay Greiner of Keota. “Even though details are light, at least there’s a moratorium on new tariffs so negotiations can proceed. I think the markets will probably trend a little higher.”

The temporary trade truce followed a dinner meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit in Argentina. The leaders met to de-escalate tensions between the world’s two largest economies.

Trump agreed to hold off raising tariffs, scheduled to go into effect Jan. 1, on Chinese imports worth hundreds of billions of dollars — implemented to end China’s unfair trade practices, intellectual property theft and narrow the nearly $400 billion trade deficit. China said it would negotiate structural and policy changes pertaining to intellectual property protection, forced technology transfer, non-tariff trade barriers that have hurt the soybean industry and other matters.

In the days following the G20 meeting:

  • Trump tweeted: “Farmers will be a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural product immediately.”
  • Treasury Secretary Stephen Mnuchin confirmed Tuesday in a CNBC interview that China has offered to buy about $1.2 trillion worth of U.S. products.
  • National Economic Council Director Larry Kudlow said he’s confident the nations will resolve their differences and China will drop its retaliatory duties on U.S. commodities.
  • S. Secretary of Agriculture Sonny Perdue told Reuters he expects China to start buying U.S. soybeans by the first of the year because Brazil has limited supplies left.
Iowa Soybean Association President Lindsay Greiner of Keota, left, talks soybeans exports with Thomas Mielke of Oil World at the recent 2018 U.S. Soybean Regional Trade Exchange in Barcolona, Spain. (Photo: Matthew Wilde/Iowa Soybean Association)

Better prices ahead?

January soybeans on the Chicago Board of Trade jumped 15 cents the first two days after the announcement, topping $9 per bushel for first time since the end of July.

“If the president is right and we start to see massive ag shipments like soybeans to China, the market will react even more positively,” Greiner said. “The timing is very good.”

Soybean prices plummeted about $2 per bushel since the trade war began in beginning of March. China, the world’s largest buyer, has largely shunned U.S. oilseeds since. China purchased more than 1 billion bushels of U.S. soybeans last year and 1.4 billion in 2016-17, government records show, but only 35.9 million bushels during the current marketing year as of Nov. 1.

A day before the top-level U.S.-China trade meeting, commodities analyst Bob Bresnahan predicted soybeans would hit $12 per bushel by 2020 after several years of down and sideways prices. The founding president and CEO of Trilateral, a Chicago-based risk management firm specializing in commodities, spoke at the 2018 U.S. Soybean Regional Trade Exchange for Europe, Middle East and North Africa. The U.S. Soybean Export Council hosted the two-day conference in Barcelona, Spain.

A positive outcome from the Trump-Xi meeting, and an eventual resolution to the trade conflict, only bolsters the projection.

“I think there’s a bottom to allow prices to rally into 2020,” Bresnahan said. “Sideways markets will work their way up into an uptrend … we could violently rally out of the (down) market.”

Plenty of soy to sell

Greiner was recently asked by a reporter if the U.S. had enough soybeans to supply China if it started buying large quantities again, along with the rest of the world.

“Absolutely,” he responded. “We have plenty to take care of everybody.”

National soybean production is projected at a record 4.6 billion bushels last year, according to the latest U.S. Department of Agriculture Crop Production Report. Iowa is pegged at 577 million bushels.

Soybean ending stocks for the 2018-19 marketing year are estimated at an all-time-high 955 million bushels.

The clock is ticking to get a deal done with China, historically the nation’s largest market for soybeans. The agreement placed a 90-day moratorium on additional duties for both sides during the negotiation process.

It’s the “first positive news” American Soybean Association Chairman John Heisdorffer of Keota has seen after months of downturned soybean prices and halted shipments.

“If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry,” he said. “We want to begin repairing damage done to our trade relations with China, which has been essential to successful soybean exports for years.”

A deal, though, is far from done.

ISA CEO Kirk Leeds said the news is encouraging for Iowa’s soybean farmers. But when politics are involved, finding enough middle ground could be a challenge.

With the window to export soybeans to China rapidly closing — Brazil’s soybean crop is expected to be ready later this month or February — Leeds says a resolution is needed fast.

“Hopefully we can return to some trading normalcy with China,” Leeds continued. “But in the meantime, we’re actively working in other markets around the world to build and maintain U.S. soybean market share.”

Contact Matthew Wilde at

For media inquiries, please contact Katie James, ISA Public Relations Manager at or Aaron Putze, ISA Communications Director at

For permission to republish articles or to request high-res photos contact Aaron Putze at Iowa Soybean Association | 1255 SW Prairie Trail Pkwy | Ankeny | IA | 50023 | US

©2018 Iowa Soybean Association On-Farm Network®. All rights reserved. On-Farm Network® is a registered trademark of the Iowa Soybean Association, Ankeny, IA.Portions of some On-Farm Network trials are paid for in total or in part by the soybean checkoff.