The global agrarian trade is witnessing a deep turbulence, thanks to US President Donald Trump's tariffs and trade restrictions. A foreign policy shift forcing nations to buy American agri commodities, and punishing nations with tariffs for not buying enough, may have led to new trade skirmish between China and the US.

In a retaliatory move against US imposed tariffs on Chinese goods, China has decided to stop buying soybean from the US. So, what happens with the US soybean surpluses?

First of all let us understand the Sino-US soybean relationship. The United States is the second largest producer and exporter of soybean in the world. It accounted for 28% of the global production in 2024/25. Key producing states are Illinois (16%), Iowa (14%), Indiana (8%), Minnesota (8%), and Ohio (8%) accounting for roughly 118.84 Million metric tonnes of soybeans.

As per U.S. Department of Agriculture (USDA) data, upwards of 90% of the soybean planted in the US, is of herbicide tolerant (HT) genetically modified (GM) varieties. The soybean has been sprayed organophosate class of carcinogenic herbicides and pesticides like glyphosate.

Nevertheless, GM corn and GM soybean contributed to 45% of $242.7 billion of revenue for US farmers. The share of soybean was $ 45.8 billion due to high export demand and use in the animal  feed and ethanol industries, domestically and abroad. Of course, till now China was the major importer of US soybeans.

On an average, it purchased about 54% of the total US soybean harvest of 2023/24. This single importer kept farm-gate prices of American soybean farmers stable and market thriving. The dependancy is best articulated by the statement of the American Soybean growers Association “Farmers can’t afford casual trade policies when China walks away from U.S. soy”.

To understand this statement, we have to look at Trump’s trade war with China in 2018 and its impact on soybean farmers. The USDA estimates that U.S. soybean farmers experienced an yearly loss to the tune of $9.4 billion in 2018, accounting for a staggering 71% of the $27 billion total loss in agricultural exports suffered by US farmers during that time. Another example of this interdependency with China comes from case of North Dakota, where 70% of the states’ soybean lands up in China.

What makes the issue very heated is, most of the top soybean producing states are Trump supporters and its is reported that 90% of the rural constituents voted for Trump for his policies in the US presidential elections hoping they would get a better deal. But their luck seems to be fading out, as China has blocked US soybean imports and is strictly punishing Trump’s rural electoral base for his tariff war.

China has imposed a 34% tariff on all US goods, including agri-commodities like soybean and after being ravaged by high US tariffs it is shunning US imports. To fill the domestic demand, China is importing soybean from Brazil, which is the top producers of soybeans and is

This shift in Chinese soybean import policy, has the American soybean farmers in a frenzy. Because a stable market propelled growth in soybean farming. Many farmers took additional debt for buying equipment, increasing acreage, etc.

But with uncertainty regarding the fate of US surpluses, the rural banks are increasing interests and demanding pay-backs.  This could potentially lead to a 1980s style farm economy collapse and foreclosures in the soybean belts, if new markets are not found for US soybean soon. The farmers are also dreading low prices for their soybeans.

Adding to Trump’s troubles are the increasing input costs in the USA from fertilisers to farm equipment and farm labourers due to the USA tariff and anti-immigration policies. Whereas China has defiantly broken through the US tariffs and making the US rural sector bleed out.

China has strategically attacked Trump’s voter base by removing key agri-commodities like soybean, pork, corn from its import list which has deprived the US soybean economy alone upwards of $12.64 billion dollars.

So where does India figure in all this? India produces 3% of the world’s soybean. But the unique thing is that India is one of the biggest producers of non-GM soybean. Hence, Indian soybean is in great demand in the European Union and the US.  India also has an emerging cattle, poultry and meat industry, which is everyday looking for cheaper soybean to fatten the animals.

Currently there is a dilemma, whether to export soybean or to use it domestically for meat production. This is the dilemma the US wants to exploit. The US soy export association’s already eyeing South Asia for its soybean surpluses. At the moment, Union minister Piyush Goyal is leading a trade mission to the USA for removing trade barriers.

Logically speaking, with China out of the picture, after cotton and corn, in order to appease its soybean farmers, the Trump administration can pressure India to buy GMO soybean and soybean oil cakes from the US.

Both these steps could lead to disastrous implications for cattle and human health. Not to mention, India could lose its non-GM or GM free tag in agriculture, which would further gravely diminish our agrarian exports and be extremely bad for our biodiversity too. So the question remains, can the government safeguard India’s food system against agri-dumping of GMO soybean? One can only hope that it does.

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