With the easing of Sino-US trade relations, the US side said at the end of last month that China has agreed to purchase 12 million tons of American soybeans before January next year, and at least 25 million tons of American soybeans annually for the next three years. Under the impetus of this expectation, the price of soybeans on the Chicago Mercantile Exchange soared, and farmers in the Midwest of the United States celebrated joyfully.

The author of the article, David Okoronkwo, a Shenzhen Scholar at the Center for Contemporary China and World Studies, University of Hong Kong, believes that beneath the surface of celebration by American farmers, a more low-key fact is: soybeans are no longer a weapon in Washington's hands, but rather Beijing's "insurance policy." Although the soybean deal appears to be a victory for Trump, it actually quietly confirmed a deep shift in the global power structure.

The article points out that soybeans once symbolized America's dominance in agriculture. In 2017, 57% of U.S. exported soybeans were sold to China, worth over $12 billion. A year later, as the U.S. initiated a trade war with China, China turned to Brazil and Argentina for soybeans, causing U.S. soybean exports to China to plummet to $3 billion. After 2019, the amount of U.S. soybeans purchased by China rebounded slightly, but did not return to pre-trade war levels.

Over the past three years, the annual U.S. soybean exports to China have accounted for about 53% of its total exports, while the proportion was close to 60% before the trade dispute. This year from January to August, China only imported 218 million bushels of U.S. soybeans, a 78% decrease compared to the previous year, while Brazil occupied approximately 93% of China's import market share for soybeans.

Soybeans being harvested in the fields in Wausau, Wisconsin, USA. IC photo

The article mentions that in April this year, as the U.S. escalated the trade war with China, China took a series of countermeasures, imposing import tariffs on U.S. soybeans that exceeded 114%, and Chinese soybean processing companies even changed their suppliers, ordering record amounts of soybeans from Brazil. The Brazilian government also vigorously promoted railway infrastructure construction to ensure a long-term, fast supply chain to Asia. At the same time, Argentina temporarily abolished agricultural export taxes in September, increasing its dollar reserves to allow more soybeans to be imported into China.

The article points out that China not only withstood the trade war initiated by the U.S., but also developed and strengthened itself. By the end of this year, China's soybean reserves are expected to reach 44 million tons, enough to feed all domestic pigs for five months without importing U.S. soybeans. In addition, under various policies, China's domestic soybean production is expected to reach 23 million tons this year, an increase of 17% over the past five years.

At the same time, under the framework of the "Belt and Road" initiative, China continues to accelerate its overseas investment, and South American ports have become an extension of China's food security network.

"In contrast, although Washington has regained customers, it has lost influence," the article points out. Now, China can let suppliers compete with each other to get the best prices, while making agricultural self-sufficiency a cornerstone of national security. For the Chinese government, purchasing U.S. soybeans has become a gesture of pragmatism, rather than a necessity.

The article states that for the Trump administration, its recent trade diplomacy is both an economic act and a political tool. By restoring soybean exports to China, Trump managed to appease his rural voters who support him, and returned to his usual mode of attention-grabbing bilateral agreements. Trump's "America First" rhetoric promises to restore export strength and stimulates American patriotic pride, but this transactional approach may exacerbate market fluctuations that should have been eased. "They turned food into foreign policy, and farmers into political pawns."

The article believes that for China, purchasing U.S. soybeans allows it to ease bilateral tensions without giving up control.

"In the future, China can alleviate tensions by resuming purchases (of soybeans), or reduce purchases when relations deteriorate. Power does not lie in the commitment to purchase, but in the freedom to stop," the article states.

The author points out that food has quietly replaced oil as the lever of the 21st century. The story of soybeans is not just a "copy of agriculture," but reflects how basic commodities have become tools with strategic influence - a country that can control the flow of food can also influence the global political landscape.

The article points out that even if China purchases 25 million tons of U.S. soybeans annually, it is merely returning to the baseline level of 2024, which cannot be considered a trade breakthrough for Trump.

"The question is, how long will China continue to pay political premiums given that it already has the ability to exit? The real leverage of food security lies not in whether one has the capacity to refuse (purchases), but in whether one has the capacity to choose. China now has the choice, while Washington is still catching up," the article emphasized again.

The author points out that if the U.S. hopes its agriculture can play an important role again, imposing tariffs is the wrong strategy. It must invest in value-added processing, renewable diesel, and diversified export markets such as India and Vietnam. He also believes that paying soil carbon compensation to U.S. farmers is more strategically valuable than subsidizing tariff losses.

"Before that, every news headline that touted 'soybean diplomacy' by the Trump administration was just another reminder that Beijing holds the remote control," the article concluded.

Regarding the U.S. claim that China has agreed to purchase U.S. soybeans, He Yadong, spokesperson for the Ministry of Commerce of China, responded on November 13, stating that the Ministry of Commerce has recently released relevant information about the joint arrangements for the Sino-U.S. economic and trade consultation in Kuala Lumpur, introducing the main achievements and consensus reached during the consultation, including agricultural trade. China is an important participant in global agricultural trade and will continue to uphold an open and cooperative attitude, deepening mutually beneficial cooperation with global trade partners, and jointly maintaining an open, stable, and sustainable global trade system.

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Original: https://www.toutiao.com/article/7573195567296266752/

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