China cuts tariffs on US farm goods, but keeps soybeans on the other side

China is offering Washington a little tariff relief — but the door is far from fully open.Beijing plans to cut tariffs on several US agricultural goods, while keeping an additional 10% tariff on soybeans, one of the biggest US farm exports to China.The Chinese commerce ministry’s tariff-reduction list issued on Monday includes corn, wheat, sorghum, vegetable oils and meals, meat and dairy products, among other agricultural goods. Soyoil and soymeal are also covered, while whole US soybeans have been excluded.The decision comes after last week’s summit in Washington between Chinese President Xi Jinping and US President Donald Trump, with markets closely watching for details on tariff relief for US farm products.The treatment of soybeans stands out as Chinese state-run buyers continue to purchase the commodity from the US. Sinograin and COFCO have bought more than 12 million metric tons of US soybeans so far. That is nearly half of the 25 million metric tons that the White House has said China agreed to purchase each year through 2028.US soybeans will nevertheless continue to carry the additional 10% tariff. Traders have said this level remains too high for private crushers to absorb, although state buyers have stepped up their purchases.“Despite the soybean being a non-sensitive item in trade, the political significance of China’s soybean purchase is enormous and carries major political implications,” said Feng Chucheng, founder and partner at Hutong Research.“Hence a separate track on soybean purchase outside the Board of Trade. This also gives Beijing a leverage to restrain US actions, especially ahead of the midterm elections.”The broader tariff reductions could help address the value of agricultural purchases that China has committed to making from the US. Trade in the agricultural and related products included in Monday’s list was worth about $17 billion in 2024, according to Reuters calculations. That is roughly equivalent to the reported purchase commitment when soybeans are excluded.The White House said in May that Beijing had agreed to buy $17 billion worth of these products annually through 2028. China has not, however, confirmed any target for such purchases.A trader based in Asia, who works for an international company selling soybeans to China and spoke on condition of anonymity, said state-run companies would continue purchasing US soybeans. The trader said the tariff reductions covering other products would help China meet the $17 billion commitment.However, the trader said lower tariffs would not necessarily make US soybeans competitive on price.The tariff moves are part of a wider effort by Beijing and Washington to maintain economic and trade ties. Both sides have agreed to set up a trade council, with its first task being discussions on a reciprocal tariff reduction covering $30 billion worth of products.While the new list covers a broad range of US agricultural goods, soybeans remain outside the tariff reduction, leaving purchases of the commodity to continue separately from the broader tariff-cutting measures.