China and US Agree to Cut Tariffs on Agricultural Products

Soybean prices are back in focus as China and the United States move to unwind tariffs on select agricultural goods, part of an effort to keep a fragile trade truce from unraveling. The two countries confirmed the framework this week, though actual Chinese purchases remain far below the targets set out last year.

In Brief

• China's Ministry of Commerce says the two nations agreed in principle to add agricultural products to a reciprocal tariff reduction plan.
• Beijing has pledged to buy at least 25 million tons of US soybeans annually through 2028.
• China also committed to at least $17 billion a year in US farm purchases for 2026 through 2028.
• Actual orders so far total just 200,000 tons for the marketing year starting in September.
• Foreign Minister Wang Yi and Secretary of State Marco Rubio spoke by phone this week to narrow trade disputes.

What the Tariff Talks Actually Cover

China's commerce ministry spokesperson He Yadong told reporters the two sides have agreed in principle to fold agricultural goods into a broader reciprocal tariff reduction framework, though he offered no specifics on timing or which products qualify. He said Beijing and Washington also share a general goal of growing two way farm trade, and that Chinese companies would buy based on market conditions and demand rather than fixed quotas. The comments followed a call between Wang Yi and Rubio, in which both sides agreed to widen areas of cooperation while trimming their list of grievances.

The Gap Between Promises and Purchases

The scale of the mismatch is notable. Under commitments cited by the White House, China is supposed to buy 25 million tons of soybeans a year through 2028, plus at least $17 billion annually in broader agricultural goods starting in 2026. Yet buyers in China have locked in only 200,000 tons of soybeans for the season beginning in September, a fraction of the annual target. Chinese crushers, the companies that process raw soybeans into meal and oil, have largely stayed out of the US market. Tariffs still sitting on American shipments, combined with lingering political uncertainty, have made US supply less attractive than alternatives.

Why the Dollar and Global Demand Still Matter

Soybean trade flows do not move in isolation from broader financial markets. A stronger dollar tends to make US agricultural exports pricier for foreign buyers, adding another headwind on top of tariffs. Investors watching commodity markets more broadly have also been tracking crude oil through the USO tracking fund, gold through GLD and silver through SLV, all of which respond to some of the same geopolitical currents shaping the US China relationship. Farm state economies, along with sectors tied to broader growth such as those tracked in the SPY and DIA, have a direct stake in whether Chinese demand for American crops actually materializes rather than staying on paper.

Whether Purchases Will Catch Up to the Commitments

For now, the tariff framework represents intent rather than delivery. He Yadong's remarks signal that both governments want to avoid letting the truce collapse, but the 200,000 ton figure against a 25 million ton annual target shows how much ground needs to be covered. Whether Chinese crushers step back into the market will likely hinge on whether the remaining tariffs actually come down and whether Washington and Beijing keep managing their disputes as calmly as this week's phone call suggested.