Experts: Future of U.S. Ag Trade Uncertain
Published: Friday, October 10, 2025
U.S. agricultural trade is currently stymied by a second trade war that has left soybean growers playing the waiting game.
While there are some new trade partners on the horizon, trade experts say none of them can replace the loss of one important market: China.
Trade was the major topic of discussion at last Tuesday's Midwest Agriculture Conference, hosted by the Federal Reserve Bank of Chicago.
The top export destinations for U.S. agricultural goods in 2024 were Mexico, Canada and China. Combined, the three countries purchased nearly half of U.S. agricultural goods. While China ranked third on the list, it used to be No. 1.
China pivoted to Brazil for soybeans after the first trade war commenced in 2018, and even more so after the U.S. imposed tariffs earlier this year. China responded by applying a 20% counter tariff on U.S. soybeans. Corn and cotton imports were hit with a 26% tariff, and pork products suffered a 60% tariff.
"For agriculture, whenever there is a trade conflict, or whenever there is a trade war, agriculture is always put on edge," said Shawn Arita, associate director of the Agricultural Risk Policy Center at North Dakota State University. "The reason is agriculture is the first sector to be targeted in terms of retaliation."
The White House is currently negotiating with Beijing on a new trade deal, but the outcome is uncertain, and farmers are getting nervous.
"It seems pretty clear that China is avoiding U.S. soybeans altogether," Arita said. "They have a boycott that gives them leverage in the negotiations. They're not going to start buying soybeans until they get something out of these negotiations.
Thus far, China hasn't placed any orders for new crop U.S. soybeans. Last year, China had purchased 30 million metric tons by this point in the marketing year. So far in 2025, overall U.S. agricultural exports to China are off by 53%.
More than just soybeans, U.S. exports of beef, sorghum, hides and skins, and poultry are also at five-year lows in terms of volume.
"What do a lot of those commodities have in common?" Arita asked. "Very, very much dependent on the Chinese market."
Exports of corn, soybean meal and ethanol are up compared to last year, he said.
For 60 years, the U.S. maintained a positive agricultural trade balance, but in 2019 "the coin flipped" and that trade balance turned negative. This year, the U.S. is expecting an agricultural trade deficit of $47 billion, according to Amanda Countryman, agriculture professor at Colorado State University. The 2025 forecast pegs imports at $220 billion and exports at $173 billion.
Countryman said the U.S. has entered a new era of trade policy with President Trump's "America First" agenda. The White House wants to decrease the agricultural trade deficit by slapping import tariffs on countries that are exploiting U.S. markets for their own benefit.
"We can think about trade protection in terms of protecting the U.S. economy through these mechanisms, primarily by imposing import tariffs," Countryman said.
After announcing the new tariff policy in April, President Trump said the U.S. would negotiate with each country to reach bilateral agreements.
"This left countries scrambling, trying to reach an agreement with the United States to avoid these relatively high, prohibitive tariffs," she said.
Several countries have already reached trade deals with the U.S., including the United Kingdom, Japan, Indonesia, South Korea, Vietnam, Philippines and the European Union. Several other possible agreements are in progress.
Adding to trade difficulties, U.S. exporters face the headwind of a strong dollar that makes U.S. commodities more expensive on the world market.
"When the dollar is strong, U.S. exports become relatively more expensive on the world market," Countryman said.
As negotiations with China play out, U.S. farmers are harvesting large corn and soybean crops that are expected to exceed storage capacities across the Midwest. In August, the American Soybean Assn. said farmers were facing a crisis with the loss of the Chinese market.
According to ASA, China has historically imported more than 60% of the world's soybean supplies, with the U.S. once serving as its top source. But retaliatory tariffs now make U.S. soybeans 20%, or $1 per bushel, more expensive than South American supplies.
"U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer," ASA President Caleb Ragland said in a press release.
With 1.4 billion consumers, the Chinese market is lucrative for food and agricultural importers. Prior to 2019, the U.S. was a major supplier of soybeans to China, selling roughly half its annual production to the Asian country. However, that percentage dropped precipitously as the trade war deepened. The U.S. and China eventually signed the Phase One agreement, but China had already started its pivot to South America.
In 2024, the U.S. share of China's soybean imports dropped to 21% while Brazil's share grew to 71%.
"And that really started during the first trade war," said David Ortega, Michigan State University professor of food economics and policy. "China started to diversify where it was sourcing its soybeans."
He said Chinese investments in food and agriculture research are increasing.
"They are also working to make their pork sector less reliant on soybeans," he said. "In corn, they are looking at other sources of protein."
He added that China is turning to Australia for beef and is pouring money into port improvements in Brazil and South America.
Return to Top of Page