US farmers push for China commitments on imports as Trump and Xi talk trade

Soybeans, sorghum and other US farm goods are expected to be high on the agenda at this week's summit between US President Donald Trump and Chinese President ​Xi Jinping, joining rare earths trade and artificial intelligence as a focus of contention.

US farmers, a key Trump constituency, want China to buy more soybeans and other US agricultural products such as ‌grains and meat, and to ease its retaliatory tariffs on American farm goods.

Shoring up trade with one of the world's largest importers of US crops could give a boost to the president and his Republican Party, who are facing headwinds going into November's midterm elections. Global trade disruptions caused by Trump's tariffs and an inflation-stoking war with Iran have rattled the farm sector and made food, fuel and other everyday purchases more costly.

But a win for US agriculture looks unlikely, analysts said, with the two sides expected to recommit to previous ​crop purchase targets without inking any new deals.

China has been able to meet its import needs in large part with shipments from other suppliers such as Brazil, while demand from elsewhere for US crops ​has remained resilient despite the Chinese trade hurdles.

Beijing has often used soybeans, America's most valuable farm export, as a bargaining chip when the two countries butt heads on trade. ⁠China is by far the world's largest soybean importer, and ever-expanding South American production has given China the option to curb or altogether halt US purchases when trade ties sour.

"They've worked hard to diversify their soybean portfolio away ​from America," said Jim McCormick, chief operating officer at AgMarket.net.

The US soybean industry has also moved to diversify by trading with other, much smaller markets, while increasing domestic consumption for biofuels.

China remains an important market for the sector, taking ​in about one-half of all US soybean exports in recent years, although that has shrunk from its nearly two-thirds share before Trump first entered the White House nearly a decade ago.

China halted crop purchases from the US for months last year after Trump slapped steep tariffs on Chinese goods, and Beijing's 10% retaliatory tariff on soybeans and other US farm goods remains in place. Since the tariff does not apply to Brazil or other rival crop suppliers, US goods have struggled to compete.

State-run importers COFCO and Sinograin returned to ​the US soybean market this summer despite cheaper supplies available from Brazil, as Beijing engaged with US negotiators over broader trade issues. But private Chinese companies have avoided US cargoes as tariffs made US soy costlier than South American ​supplies.

"What's preventing the private crushers from entering into the market is that final tariff," said a US soybean exporter, who asked not to be named because he is not authorized to speak to the media. Removing the tariff would put the price ‌of US soybeans ⁠at Pacific Northwest ports on par with Brazilian shipments, he said.

Farm groups including the American Soybean Association and the National Sorghum Producers sent letters to Trump last week urging him to persuade China to scrap its retaliatory tariffs and to solidify its purchasing commitments.

The groups are also pushing Trump not to resume charging fees on Chinese-built or Chinese-operated ships when they enter US ports. The fees, worth millions of dollars per port call, were suspended shortly after taking effect last year, but that suspension is due to expire in November, in the middle of the US harvest.

Mixed Results

China's commitments to expand US agricultural purchases have shown mixed results since a summit last year in Busan, South Korea, and a ​meeting in Beijing in May. Analysts and traders say ​China is on pace to meet its commitment ⁠in Busan to buy 25 million metric tons of soybeans annually, but its pledge to import $17 billion annually in grains, meat and other farm goods is far less certain.

As of 10 September, the US Department of Agriculture had confirmed nearly 10 million metric tons of US soybean sales to China from this year's crop. Additionally, traders and analysts believe ​at least half of the 6 million tons of sales reported to undisclosed destinations through September 10 represent purchases by China.

China has yet to purchase any US ​corn for the current season, while ⁠sorghum purchases have not increased as much as many traders had expected. Recent large purchases of corn and sorghum from Brazil, however, suggest China has an appetite for imports, traders said. They added that disruptions to Black Sea shipping due to the Russia-Ukraine war have cut off Ukrainian corn cargoes to China, which could steer demand to the United States.

The National Sorghum Producers urged Trump to push for a "concrete and enforceable annual commitment" from China to buy 5 million to 7 million metric ⁠tons of US ​sorghum, an increase from annual imports of roughly 4 million to 5 million tons before the trade war.

In the longer term, US farm groups ​are urging the Trump administration to work towards a less turbulent agricultural trade relationship with China by including soybeans, sorghum and other crops among a list of non-sensitive trade items covered by a proposed US-China board of trade, which would allow trade of agricultural commodities to continue while ​more sensitive trade topics are discussed.

After a framework agreement in May to launch the bilateral trade board, Trump and Xi may discuss further details during talks.