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Earlier this month, the Trump administration announced a deal<\/u><\/a> with China that would open up trade on precious minerals, lower tariffs, and increase agricultural purchases. Like most of the Trump administration\u2019s trade announcements, there was no official text or signed documents made public. So, what should we make of this announcement? Is the China deal an actual trade agreement, or just a promise to finalize an agreement in the future?\u00a0<\/p>\n The implications are important for U.S. \u00a0farmers, who over the next several months will be meeting with their bankers to line up loans and make planting decisions<\/u><\/a> for 2026. According to a fact sheet<\/u><\/a> by the Trump administration, the deal includes a commitment from China to purchase 12 million metric tons (MMT) of soybeans in 2025, and a minimum of 24 MMT of soybeans for the next three years. That amount is slightly below the average Chinese purchases<\/u><\/a> of soybeans since 2020 of around $28 billion a year. China has yet to publicly confirm the White House claims on specific amounts or timing of soybean purchases.\u00a0\u00a0<\/p>\n A further complicating factor is continued Chinese tariffs on U.S. agricultural goods. According to Inside U.S. Trade<\/u><\/a>, the Chinese Ministry of Finance announced that for one year it would suspend a 35% tariff that affects food and agriculture imports, but would retain an existing 10% tariffs that affects soybeans, sorghum, and beef, among other agricultural goods. The Wall Street Journal reports<\/u><\/a> that China likely will insist that any purchases it makes will be based on \u201cmarket prices,\u201d and if market prices are cheaper coming from another country, China may not meet the targeted numbers touted by the Trump administration. Progressive Farmer\/DTN reported<\/u><\/a> that, when considering the 10% tariffs, Brazilian soybeans are cheaper than those coming from the U.S. On cue, Reuters reported last week that China made purchases of Brazilian soybeans<\/u><\/a> from global grain giants Cargill, ADM, Bunge, and Louis Dreyfus. The Associated Press reported<\/u><\/a> on government data showing that China has only made small soybean purchases since the announced deal, raising questions about whether the 12 MMT target can be met \u2014 especially as China currently has a glut of soybeans<\/u><\/a> stockpiled to meet most of its immediate needs. \u00a0<\/p>\n During the first Trump administration, the U.S. and China agreed to what was called a Phase One deal. As part of that agreement, China agreed to purchase $80 billion of agriculture goods from the U.S., but ultimately only purchased $61 billion<\/u><\/a> over the years covered in the deal. \u00a0<\/p>\n IATP has been tracking and assessing global trade agreements since the 1980s. When assessing trade announcements, here are five things we are looking for to assess how solid the deal is, and how they relate to this purported deal with China: \u00a0<\/p>\n The China deal announced this month doesn\u2019t follow any of these basics on trade deal transparency, leaving major questions still on the table. The Trump administration\u2019s erratic use of tariffs, including threatening to increase tariffs on China by 100%<\/u><\/a> just a few weeks ago, has raised questions about whether any of the announced deals are long-lasting. The follow-up on several publicly announced deals by the administration has led to more confusion. The announced EU trade deal still faces major questions and has yet to be approved by the EU Parliament. The EU Parliament is debating how to protect itself from future tariffs<\/u><\/a> from the U.S. if the Trump administration backtracks. Publicly announced trade deals with Japan<\/u><\/a> and South Korea<\/u><\/a> have later revealed unresolved contentious issues that are core to the deal. \u00a0\u00a0<\/p>\n Further complicating matters is a major Supreme Court case challenging the Trump administration\u2019s imposition of tariffs under the International Economic Emergency Powers Act (IEEPA), which allows the President to impose sanctions during a national emergency. At the case\u2019s hearing, Supreme Court justices expressed deep skepticism<\/u><\/a> that IEEPA allowed the President such broad authority (see the Roosevelt Institute\u2019s backgrounder<\/u><\/a> on the Supreme Court case). If the tariffs are struck down (a decision is expected in the next few months), the Trump administration would have to refund at least a portion of the money<\/u><\/a> collected from U.S. companies under IEEPA tariffs. Such a decision would slow down Trump\u2019s tariff-led trade policy but not stop it. The administration could still justify tariffs under unfair trading practices or national security grounds \u2014 but the process of implementing those tariffs would take weeks and potentially months, not hours. \u00a0\u00a0<\/p>\n While the Trump administration has upended the process of finalizing traditional trade agreements, that doesn\u2019t mean previous trade agreements were open and transparent. IATP and other civil society groups have warned for decades, including with the Biden administration<\/u><\/a>, about the secretive nature of trade negotiations and the often exclusive access that powerful interests, including global agribusiness, have in shaping the text. This exclusive process has resulted in corporate-friendly outcomes and has played a role in the current backlash against past free trade agreements like the North American Free Trade Agreement and the World Trade Organization. \u00a0<\/p>\n Following the China deal, President Trump posted on Truth Social<\/u><\/a>, “Our Farmers will be very happy! In fact, as I said once before during my first Administration, Farmers should immediately go out and buy more land and larger tractors.” But even in the most rosy scenario, the China deal doesn\u2019t help farmers with rising costs for inputs and machinery tied to U.S. tariffs, nor with ongoing market losses<\/u><\/a>. A recent agriculture lender<\/u><\/a> survey concluded that less than half of farmers are expected to be profitable in 2026. Unfortunately, a China deal with many details still unclear adds more uncertainty for farmers as we head into 2026.\u00a0<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":" Earlier this month, the Trump administration announced a deal with China that would open up trade on precious minerals, lower tariffs, and increase agricultural purchases. Like most of the Trump administration\u2019s trade announcements, there was no official text or signed documents made public. So, what should we make of this announcement? Is the China deal […]<\/p>\n","protected":false},"author":1,"featured_media":313532,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12026],"tags":[14456,6618,10465,81436],"dealstore":[],"offerexpiration":[],"class_list":["post-313531","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agriculture","tag-agreement","tag-china","tag-deal","tag-handshake"],"yoast_head":"\n\n
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