The Trump administration on Wednesday said that China is on track to meet its agricultural purchase commitments, with the sector expected to feature prominently in the deliverables for US President Donald Trump and Chinese President Xi Jinping’s talks in Washington later this month.
“China is ramping up their purchases,” said Luke Lindberg, the US Under Secretary for Trade and Foreign Agricultural Affairs at the US Department of Agriculture (USDA). “We’re seeing that progress happen.”
Speaking at a Council on Foreign Relations event, Lindberg added that China is on track to buy US$17 billion worth of US agricultural products this year, in addition to soybeans, which he said would bring annual sales to US$30 billion.
He noted that China had already met its commitment to buy 12 million metric tonnes of US soybeans in the 2025 season and is “on track right now” to meet the agreed-upon target of 25 million metric tonnes this year.
In the run-up to Xi’s visit, USDA flash reports show a rise in soybean exports to China, crossing 700,000 metric tonnes in the first nine days of September.
The soybean deal was a key outcome of the trade truce reached in Busan, South Korea, last year and was expanded after another leaders’ meeting in May in Beijing to include China’s promise to buy at least US$17 billion worth of US agricultural products annually for the next three years.
The commitments fell well short of the US$40 billion in agricultural exports to China recorded in 2022.
The loss of a large share of the Chinese market, coupled with rising fuel and fertiliser costs linked to the US war in Iran and President Trump’s tariff policies, has deepened the crisis facing US farmers.
Uncertainty remains over US farm incomes and exports
The squeeze has added to uncertainty over farm incomes and exports, prompting the administration to step up efforts to help producers find alternative markets for their crops.
However, Lindberg asserted that soybean farmers are “very happy” with their China sales and are not interested in going “much higher” than current levels, given their focus on “diversification” of export markets.
John Bartman, an Illinois-based fifth-generation soybean farmer, disputed the claim and termed the administration’s farm policies “all buffer and no results”.
“The American soybean farmer used to have 50 per cent of China’s soybean market, and now we’re lucky if we have 20 per cent of it,” he said.
Gene Seroka, executive director of the Port of Los Angeles, also said soybean sales had not picked up and pointed to weak beef exports to China, even though purchase promises were another key outcome of the Beijing agreement.
“Sale of beef from the last meetings is nearly impossible because we are simply, as a country, importing beef products just to keep up with domestic demand,” he said.
China’s renewal of licences for US meat plants has yet to revive beef exports, with higher US prices and weaker Chinese demand weighing on shipments.
As in May, agricultural purchases are expected to be a key outcome for the coming Trump-Xi summit.
“We expect that we will probably have some more announcements on agriculture and non-tariff barriers related to agriculture to incentivise American sales into China,” US Trade Representative Jamieson Greer said in an interview with Fox News last week.
In July, the Chinese embassy in Washington said agriculture and aviation were among the sectors selected for tariff-reduced trade, adding that the two sides had “set a guiding objective of expanding two-way agricultural trade” and agreed “in principle” to include agricultural products in a framework for reciprocal tariff reductions.
The South China Morning Post also reported last week that the Busan trade truce was likely to be extended, along with the operationalisation of the US-China Board of Trade.
However, these agreements are unlikely to move the needle for US farmers.
Bartman highlighted rising input costs, calling them a “self-inflicted wound” resulting from Trump’s policies, including the war in Iran and tariffs.
“We are still operating at below break-even costs,” he said.
Question remains whether US is reliable trading partner
On government efforts to find export markets beyond China, he said buyers in new markets no longer have assurance that the US is a “reliable trading partner any more”.
“They don’t know what things are going to cost because, from day to day, he changes the tariff rate,” he added, referring to Trump.
Jeff Winton, a dairy farmer in upstate New York, also said that farmers are under “historic stress and pressure” due to higher costs, tariff policies and a “diminishing labour force” as a result of an immigration crackdown.
“There is a growing mistrust among American farmers about anything coming out of Washington now,” Winton said. -- SOUTH CHINA MORNING POST
