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Trump trade war sequel?Trump trade war sequel?

Repeat of trade squabble is last thing U.S. farmers need.

Bruce Blythe, Senior Editor, Commodities

February 3, 2025

2 Min Read
China and U.S. trade war
Getty Images/Dilok Klaisataporn

If a soybean futures chart is any indication, the market has been bracing for some time now for what may be Trump Trade War, Part 2.

Soybean futures managed a modest early-2025 rally to put some distance between the four-year lows around $9.47 per bushel posted late December but remain well below last year’s $12-plus peak.

Slumping prices largely reflect a bumper U.S. harvest and a record crop expected from Brazil, the combination of which is expected to swell global soybean stockpiles to an all-time high. While a strong jump in U.S. exports has buoyed prices recently, Trump’s just-announced tariffs hardly would seem to be a recipe for an extended rally.

Last weekend, President Trump ordered 25% tariffs on Mexican and most Canadian imports and 10% on goods from China, starting February 4. Mexico and Canada, the top two U.S. trading partners, immediately vowed retaliatory tariffs. China is the No. 1 market for U.S. soybeans.

We may have seen this movie before. China may retaliate, as it did during Trump’s first administration, by slashing purchases of U.S. ag goods. The last go-round in 2018-19 hit U.S. soybeans hard, and China has since shifted most of its soy purchases to Brazil, the world’s top producer. Soybean futures briefly sank near $8 and averaged just over $9 those two years.

Related:How will tariffs impact commodity prices?

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Retaliatory tariffs during Trump's first term resulted in around $27 billion in lost U.S. agricultural exports, including $25.7 billion in sales to China, according to Rabobank analysts. Depending on how the current dispute plays out, a second trade war could cost soybean farmers $3.6 billion to $5.9 billion in annual production value, according to a 2024 study by the National Corn Growers Association and American Soybean Association.

But opportunities could appear as a result of a reordering of global trade relationships. For example, a trade deal between the U.S. and the European Union could result in all or most of EU soy and soymeal import demand shifting to the U.S. and away from South America, according to a recent Rabobank report.

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Trade

About the Author

Bruce Blythe

Senior Editor, Commodities, Farm Futures

Bruce Blythe is a senior editor at Farm Futures. He has covered commodity markets, agribusiness and the farm economy for Bloomberg, Dow Jones Newswires, Reuters and Farm Journal Media's Pro Farmer. He got his start in ag news as a wire service reporter writing about the livestock and grain futures markets from the trading floors of the Chicago Mercantile Exchange and the Chicago Board of Trade.

Blythe also worked as an assistant managing editor at Crain’s Chicago Business and, most recently, as a financial writer and editor for Charles Schwab's Insights & Education editorial team. 

He grew up on his family’s grain and livestock farm outside Williamsburg, Iowa, and holds a degree in agricultural journalism from Iowa State University. He lives in Elmhurst, Ill., with his family.

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