With just one and a half months to go before the year ends, China still hasn’t ramped up purchases of U.S. soybeans under a trade agreement made with President Donald Trump a few weeks ago.
After he met with Chinese President Xi Jinping at a regional economic summit in South Korea, the White House said Beijing committed to buying at least 12 million metric tons of U.S. soybeans during the final two months of 2025 and buying at least 25 million tons annually in 2026, 2027, and 2028.
That’s after China hadn’t placed any orders for U.S. soybeans this harvest season amid the trade war with Trump, creating panic among farmers who had relied on the world’s second largest economy as their top export market.
Meanwhile, Beijing has turned to Brazil and Argentina for soybeans, which are also cheaper as they don’t face retaliatory Chinese tariffs. Now, China has imported so much supply from South America it has a glut of soybeans.
Arlan Suderman, chief commodities economist at StoneX, said in a note on Tuesday the latest data from China “provided no evidence to support the notion that there will be a substantial increase in state purchases to meet the 12 million metric ton commitment for calendar year 2025 as stated by the White House.”
China’s soybean processors have purchased about 40 million tons from South America this season and “have zero financial incentive” to buy more U.S. soybeans, he added.
Such purchases would have to come from state buyers for China’s reserve, but there’s very little indication that they are on track to buy 12 million tons by year’s end or 25 million next year, Suderman warned.
In fact, China’s oversupply of South American soybeans has slashed prices more than 20% from an April peak in key coastal Chinese regions, according to Mysteel data cited by Reuters.
Despite the glut, private importers are still booking soybean shipments from Brazil for next month, traders told Reuters.
Non-compliance with terms of the deal reached in Korea could reignite the U.S.-China trade war, which earlier saw Trump threaten to impose an additional 100% tariff on Beijing in response to strict export controls on rare earths.
“The administration expects our trading partners to adhere to their deal commitments,” a U.S. official told Fortune. “The president reserves the right to adjust tariff rates, export controls, and other concessions to hold our trading partners accountable to their deal commitments.”
China’s embassy in the U.S. didn’t immediately respond to requests for comment.
StoneX’s Suderman noted China appears to be complying with other parts of the trade deal, namely limiting exports of components used to produce fentanyl.
Those export curbs cleared the way for Trump to lower his fentanyl-related tariff on China to 10% from 20%. Beijing has suggested removing that remaining 10% is necessary for it to reverse its own retaliatory duty on U.S. agricultural commodities, Suderman explained.
“Unfortunately, time is running out for the removal of that 10% tariff to make much of a difference in the purchase of U.S. soybeans, with cheaper new crop Brazilian supplies already booked to start arriving at Chinese ports in February,” he added. “The door hasn’t closed yet for U.S. soybeans, but we’re getting very close to that point.”