China has completed its initial commitment to purchase 12 million metric tons of U.S. soybeans, Treasury Secretary Scott Bessent announced Tuesday from the World Economic Forum in Davos, Switzerland. But the broader trade agreement—which requires China to buy 25 million tons annually over the next three years—faces uncertainty as President Donald Trump threatens to shift tariff policy.
Trump’s recent threats of 25% tariffs on countries buying Iranian goods and 10% tariffs on European allies jeopardize the broader agreement. American farmers, already struggling with high production costs, are watching closely as prices have fallen since the deal was announced.
The Purchase Milestone
China placed additional orders for American soybeans as recently as this week, Bessent said, and “they did everything they said they were going to do.” U.S. Department of Agriculture data showed China had purchased more than 8 million tons of U.S. soybeans by Jan. 8, with several orders of 132,000 to more than 300,000 tons placed since then.
The soybean purchase was part of a trade truce negotiated after Trump and Chinese leader Xi Jinping met in South Korea in October 2025. The agreement came after China paused soybean purchases from the U.S. during an earlier phase of their trade dispute.
Tariff Uncertainty Threatens Broader Deal
But the agreement now depends on stable trade policy. Iowa State University agricultural economist Chad Hart said the new tariffs create ambiguity about the deal’s binding nature.
“Those new tariffs—what does that mean for this agreement? Does it throw it out? Is it still binding? That’s sort of the game here now,” Hart said.
The broader 25-million-ton commitment remains binding on paper, but Trump’s unpredictable approach to trade policy has created nervousness among those relying on the agreement.
Market Pressure Compounds Farmers’ Struggles
The agreement caused soybean prices to surge above $11.50 per bushel after it was announced, but the price has since fallen to about $10.56 per bushel—near where it stood a year ago. The decline is concerning for farmers operating at thin margins.
Cory Walters, an associate professor of agricultural economics at the University of Nebraska-Lincoln, said farmers face mounting pressure across multiple fronts.
“Everything is changing—the land rental market, the fertilizer market, the seed market and it’s all pinching the farmer when they go to do their cash flows. The ability to make a decision is tougher now because of all the uncertainty in the market,” Walters said.
China’s Diversified Sourcing and Federal Aid
China has shifted much of its soybean purchasing to Brazil and Argentina in recent years. According to World Bank data, Brazilian soybeans now account for more than 70% of China’s imports, while the U.S. share has dropped to 21%.
The Trump administration is planning to distribute roughly $12 billion in aid to American farmers to help them weather trade disruptions. Soybean farmers will receive $30.88 per acre, corn farmers $44.36 per acre, and sorghum farmers—another crop affected by the earlier Chinese purchasing pause—$48.11 per acre, based on USDA production-cost calculations. Whether such aid addresses the deeper cost pressures farmers face remains uncertain given the market volatility surrounding trade policy.