Soybean farmers across the country praised the May 12 news that U.S. and Chinese officials reached an agreement that temporarily reduces tariffs levied by the countries on exported products, including U.S. soy. The pause is in effect for 90 days while negotiations continue. Farmers across the soy-producing states, including Wisconsin, are optimistic that during this time, a long-term Phase Two agreement can be reached that addresses Chinese tariff and non-tariff barriers to trade. 

“Hopefully this is the first step in the right direction toward a long-term trade deal and although there are some unknowns, we commend the administration for listening to our concerns,” said Tanner Johnson, a Barron County farmer and member of the American Soybean Association’s (ASA) Executive Committee. “During planting season, this is giving all of us a degree of optimism.”  

A joint statement from the two countries explained the U.S. will reduce reciprocal tariffs on Chinese goods to 10% which, combined with a 20% duty on China regarding fentanyl, places Chinese imports at a minimum rate of 30%. China, in return, reduced its retaliatory tariffs on U.S. goods to 10% and agreed to remove any non-tariff trade barriers and restrictions imposed on U.S. products following “Liberation Day” April 2 when President Trump announced his reciprocal tariff plan. 

Wisconsin ASA Director Tanner Johnson

“This is a big development and one we are very pleased to hear, yet the tariff that remains in place for U.S. soy is far from inconsequential: Products purchased from our competitors in Brazil and Argentina are not burdened with this extra cost. That means China will turn to South America first for its purchases and only buy U.S. soybeans when it absolutely must,” ASA President Caleb Ragland said. “Also important to note, the 90-day pause will end in August – right before our harvest season. We need the administration to continue its negotiations with China to find a long-term, sustainable solution that removes retaliatory tariffs and protects market access for our agricultural products.”

In the most recent marketing year, U.S. exporters shipped 46.1 million metric tons of soybeans to foreign markets, accounting for over $24 billion in sales. Of those exports, nearly 25 MMT of soybeans went to China. That volume represents 54% of U.S. soybean exports and accounts for $13 billion in value for U.S. soybean farmers.  

Wisconsin farmers produce about $1.3 billion of soybeans each year; most of the state’s soybean crop is exported to markets in China, Canada and Mexico. In total, Wisconsin exports an average of nearly $4 billion in ag and food products to 142 countries. Since 2021, the state’s dairy, meat and crop exports have increased by $210 million. The Wisconsin Soybean Association and ASA have been active in warning of the economic dangers that tariffs place on U.S. farmers and rural America.  

“We’re constantly sharing our thoughts on the situation and how tariffs impact our global partnerships,” Johnson said. “I’m very proud of the job ASA and WSA are doing to communicate our message and support our farmers. I know we have a seat at the table and these decisions are being made with our thoughts in mind, so it’s nice to know our efforts are paying off.” 

While the soy industry works incessantly to seek new and develop existing markets for both whole beans like those imported by China and for soy oil and meal use, it is a slow process that can take years. The China market was started in the 1980s and took more than 40 years to fully establish. Those relationships are critical, as is the ability of U.S. soy farmers to supply them with high-quality U.S. soy on a consistent basis. 

U.S. soy’s relations with China are still encumbered by damage done in 2018/19. The industry looks to the administration to help repair and retain its relationships with key markets such as China in the weeks ahead through fruitful negotiations. 

 Johnson is heading with the U.S. Soybean Export Council in early June to Tunisia to grow market access in North Africa. Johnson, fellow ASA Director Don Lutz and WSA leaders will return to Washington, D.C., in mid-July for ASA Board Meeting and Hill Visits with legislative leaders.  

 “Building new markets, both at home and internationally, continues to be a top priority,” Johnson said.