Trump has now found himself in an uncomfortable spot: American farmers are howling over China’s refusal to buy US soybeans, a crisis that is hitting the Republican heartland the hardest.
On October 1, local time, Trump announced he was preparing for a “major topic of discussion” with President Xi Jinping at the upcoming Asia-Pacific Economic Cooperation (APEC) summit to demand that China restart its soybean purchases.
Trump vows a soybean showdown with Xi at APEC. (AP Photo)
Trump’s Social Media Bluster
True to form, Trump took to his own social media platform, Truth Social, to blame China for the farmers’ woes, claiming Beijing was using “negotiations” as an excuse not to buy. He declared his administration would direct part of US tariff revenues into subsidies for farmers while accusing former president Joe Biden of failing to enforce an earlier multibillion-dollar trade agreement with Beijing that promised more farm exports. Trump ended his rant with the slogan: “MAKE SOYBEANS, AND OTHER ROW CROPS, GREAT AGAIN!!”
The high-stakes APEC meeting will be held in Gyeongju, South Korea, from October 31 to November 1. Back on September 22, China’s Ministry of Foreign Affairs emphasized that Heads-of-state diplomacy plays an irreplaceable role in providing strategic guidance for the China-US relations. The presidents of China and the US maintain close exchanges and communication” and "The two sides are in communication”. However, “I have no information to share at the moment,” said the MFA spokesperson.
Trump’s fiery post sent ripples through the market. According to Bloomberg, US soybean futures spiked 1.9% before slipping back, their sharpest daily swing since late August.
The report also noted that only a day earlier, Republican senators vented their frustration during a meeting with US Ambassador to China David Perdue, warning that Beijing was unlikely to resume soybean purchases soon and blasting the lack of a long-term US strategy.
The problem for Trump is obvious: farming states, for long a Republican stronghold, are being hammered by the collapse of the export market. With federal subsidies shrinking, America’s rural communities are under immense strain—turning into a political headache for Trump’s party ahead of next year’s midterm elections. GOP lawmakers from the agricultural heartland are now pressing harder than ever for Trump to cut a deal with Beijing.
China Holds the Cards
As the world’s largest soybean buyer, China wields enormous influence. US Department of Agriculture data shows that by mid-September, weeks into the new sales year, China had not booked a single cargo of American soybeans—the first time this has ever happened since records began in 1999. Last year, China bought over $12 billion worth of US soybeans, accounting for more than half of America’s soybean exports.
But Trump’s go-it-alone tariff war has backfired badly on his own farmers. Traders note that suspending tariff hikes won’t help much when China still imposes a 23% duty on American soybeans. By comparison, Argentina and Brazil enjoy tariffs of only 3%. Argentina has even scrapped its grain export taxes temporarily, making its soybeans cheaper still.
China’s tariffs make US soybeans uncompetitive against Brazil and Argentina. (AP Photo)
Farmers Feeling the Pain
The White House has started to realize the political cost. On September 25, Trump promised reporters in the Oval Office that tariff revenues would be redirected to farmers, insisting they are “for a little while going to be hurt, until it kicks in, the tariffs kick in to their benefit,” and “Ultimately, the farmers are going to be making a fortune.”
Yet for America’s farmers, the promise of eventual benefits remains abstract, while their mounting losses are very real. Axios reported that farmers now face between $100 and $150 in losses per acre.
To add to Trump’s troubles, Bloomberg pointed out that his “tariff cash for farmers” scheme could collapse in court. His tariffs, imposed under emergency powers, were already ruled unlawful by a lower court. If the Supreme Court upholds that ruling, the federal government may be forced to refund tens of billions of dollars in collected tariffs—a devastating blow to Trump’s trade war narrative.
Deep Throat
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