The re-election of Donald Trump as US President brings uncertainty for the US soyabean sector and the wider US agriculture industry due to his proposals to expand on aggressive trade tariffs introduced during his first term, Argus Media reported.
Trump won a second presidential term on 5 November after campaigning to impose tariffs of up to 20% on all foreign goods and a 60% tariff on all Chinese goods, the 6 November report said.
Reigniting trade tensions with China is a primary concern for US agriculture markets, particularly for US soyabean exports as China is the largest purchaser of US soyabeans, according to the report.
Although the immediate impact of Trump’s election was not clear at the time of the report, some sources believed his victory could increase the rate of US corn and soyabean purchases ahead of Trump taking office in January, Argus Media wrote.
However, others believed buyers could delay purchases and wait for prices to settle after the election, the report said.
Some US buyers are also avoiding long-term contracts to import soyabean products due to the risk of future tariffs, according to the report.
The trade’s initial reaction to the re-election Trump was bearish for soyabeans and corn on the Chicago Board of Trade on 6 November, Farmtario reported on 7 November.
Meanwhile, the US Federal Reserve’s interest rate announcement on 7 November and the US Department of Agriculture (USDA)’s supply and demand report published the next day were likely to have a bullish effect on those commodities, Farmtario quoted Allendale president Steve Georgy as saying.
“The effects that Trump could have on the market, especially if he starts talking tariffs again, those are negative for the grain market,” Georgy said.
With Trump set to be sworn in on 25 January, Georgy said any tariffs would be implemented some time in 2025, with another bearish effect on US soyabean and corn prices.
Despite an uncertain future for the bilateral USA-China relationship following Trump’s re-election, China remained an attractive market for the USA, Jason Hafemeister, an acting deputy undersecretary of the USDA, was quoted as saying in a 7 November South China Morning Post (SCMP) report.
While declining to speculate on the policies the Trump administration could introduce, Hafemeister called on Chinese authorities to reform tariffs, health certification for imports, and registration mandates on US agricultural products to ease the flow of goods.
“There’s a natural fit between the USA and China … agriculture has been a very big success story in the US-China relationship,” he said.
Harley Seyedin, president of the Guangzhou-based American Chamber of Commerce in South China, was quoted as saying US businesses still expected a positive outcome from the election result.
“American companies operating in China remain optimistic about the future, recognising that the election presents an opportunity for renewed focus on stability, cooperation and sustainable growth in US-China relations,” Seyedin told the SCMP.
“Many businesses are hopeful that the next administration will prioritise constructive engagement, balanced trade policies and predictability in global markets.”
In the current marketing year, China’s purchase commitments for US soyabeans totalled 11.13M tonnes, down about 7% from the previous year’s 12.02M tonnes.
Chinese purchases of 2024/25 crop soyabeans from the USA had slowed from the rate earlier in the year, partially due to concerns about the election and US trade policy, the report said.
China made its first purchase of 2024/25 crop soyabeans in July but had purchased US new crop soyabeans as early as January during the 2023/24 marketing year.
US agricultural exports to China have been declining in recent years as Beijing attempts to diversify its supply chains in the face of geopolitical tensions, turning to countries like Brazil for staple crops like corn and soyabeans, according to the SCMP report.
The value of US farm exports was estimated at US$27bn for the 2024 fiscal year and is forecast at US$24bn for next year, according to the USDA’s quarterly outlook published in August.
In 2023, around US$33.7bn of US agricultural products were sold to China, the USDA report said.
