US soybean exports to China at risk amid lingering trade tensions

US-China trade tensions could impact agricultural trade between the two countries, particularly soybeans, and this growing dispute could strengthen trade ties between Russia and China, according to Edwini Kessie, director of the Agriculture and Commodities division at the World Trade Organization.

China is one of the world’s largest feed importers, mainly buying from the US and Brazil. Recently, China has been focusing on diversifying its feed imports from various origins.

“We have already seen that China has diversified its soybean imports over the last decade. Brazil, in particular, has become an increasingly important origin for China’s feed imports,” Kessie said in a wide-ranging interview with Platts, part of S&P Global Commodity Insights.

Even as US-China trade hinges on the success of tariff developments, there has been some improvement between the two countries after both governments agreed to partially roll back tariffs and retaliatory measures.

“We are hopeful that recent progress can be built upon with further steps to de-escalate tensions and ease trade between these two economies,” Kessie said.

“Dialogue between these two major economies is critical to ensuring that trade in agricultural goods and other sectors continues to flow smoothly.”

China-Russia trade gains

Any trade dispute between China and the US is expected to push China away and potentially strengthen its ties with Russia.

“Russia could stand to benefit from recent US-China trade tensions, as China seeks to continue diversifying its imports from a wider range of origins,” Kessie said.

China has long supported domestic rice and wheat production and remains largely self-sufficient in these products.

However, China continues to import oilseeds such as soybeans for animal feed, mostly from Brazil and the US and vegetable oils such as sunflower oil and rapeseed oil from Russia and others, he said.

Weather and war: Major challenges for agriculture

While US-China trade relations take center stage, several factors have impacted global agriculture markets.

Climate change and the environment have been key challenges the agriculture sector faces.

In recent years, drastic weather changes have impacted production yields and added pressure on exportable supplies, posing food security problems on several occasions.

“Changing temperature and precipitation patterns are set to affect food and agricultural markets, along with more frequent and intense extreme weather events,” Kessie said.

Conflicts in several regions are also worsening food insecurity, particularly impacting vulnerable populations in low-income countries who are most affected by war and instability, he said.

The most visible impact of recent geopolitical tensions has been on the stability and predictability of global markets, according to Kessie.

For instance, the outbreak of war in Ukraine stoked concerns among food importers about the supply of grain from the Black Sea region.

However, many countries in Africa were able to switch to importing grains from other world regions, such as Latin America, and the initial spike in food prices eased after the first few months, Kessi said. “The reopening of maritime trade from the Black Sea region also played an important role.”

Food security remains top priority for WTO

Kessie said that WTO members have consistently raised trade and food security concerns.

“We have seen the worrying deterioration in recent years in the number of hungry people in the world – with COVID-19, conflicts, climate change and economic downturns driving this trend.”

More recently, trade tensions between major economies have led the WTO and other institutions to downgrade projections for trade and economic growth, which is critical for lifting people out of poverty and hunger, he added.

Food-importing nations have expressed concerns about the impact of export restrictions on food security, especially in the world’s poorest countries. Additionally, other countries have raised the issue of how import restrictions and temporary safeguards can adversely affect food access and producers’ livelihoods, Kessi said.

Regional trade agreements could ease the food supply security situation and benefit global agricultural trade.

“Regional trade agreements can help to strengthen and deepen economic integration between trading partners in a particular part of the world. These agreements tend to build on the framework of global rules that have been negotiated over decades at the WTO,” Kessie said.

However, Kessie pointed out that regional trade agreements have struggled to significantly address issues like agricultural subsidies, which require countries to collaborate and negotiate in a multilateral setting.

The WTO will hold its next ministerial conference in March 2026 in Cameroon, where agriculture and food security are expected to be prominent topics on the agenda, he said.

Tags: soybean, USA, China