Xi-Trump summit may yield farm deal as China limits soybean imports

Before the trade war kicked off in 2018, China sourced over 90% of its soybeans from the United States. By 2024, that number had collapsed to roughly 20%. That’s not a dip. That’s a restructuring.

The upcoming Xi-Trump summit, anticipated for May 13 in Beijing, is expected to put agriculture front and center in US-China trade negotiations. American farmers are pushing hard for China to commit to purchasing at least 25 million metric tons of soybeans annually. The problem: China may not need them.

The great soybean divorce

China didn’t just reduce its US soybean purchases. It replaced them. Brazil and Argentina have become the primary beneficiaries of Beijing’s supplier diversification strategy, with China spending an estimated $12 billion on soybeans from those two countries in 2024. US purchases, by comparison, clocked in at roughly $4.5 billion.

In English: for every dollar China spent on American soybeans, it spent nearly three dollars on South American ones.

That represents a reduction of over 70% in US soybean imports since the trade war began.

China’s demographic problem changes the math

Even if Beijing wanted to throw American farmers a bone, the underlying demand picture is shifting in ways that no trade agreement can reverse.

China’s population is aging. Its economic growth trajectory has slowed compared to the double-digit expansion years that fueled a seemingly endless appetite for imported commodities. Analysts point to these demographic challenges as a key reason why China’s overall import enthusiasm has cooled, not just for soybeans, but across the board.

A commitment to buy 25 million metric tons annually would be meaningful in the short term. It would signal goodwill and provide a tangible deliverable that both sides could point to as evidence of progress. But it would also likely require China to buy more than it organically needs.

Beyond soybeans: corn, wheat, and the broader commodity play

The summit isn’t just about soybeans. Grain futures markets have been surging in anticipation of potential agreements covering corn, sorghum, and wheat as well.

Critical issues beyond agriculture, including technology transfers, rare earth minerals, and territorial disputes, remain unresolved.

For commodity-focused investors, the short-term setup is clear. Agricultural futures are elevated on deal expectations, creating both opportunity and risk. A strong commitment from Beijing would validate current prices and potentially push them higher. A vague joint statement without specific tonnage numbers would likely trigger a sellback.

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