Close but expected. This is the reaction on Wall Street after President Donald Trump agreed to extend the US-China tariff truce hours before the August 12 midnight deadline. Over the next 90 days, Beijing and Washington will engage in additional rounds of trade negotiations covering broader economic issues, which may include soybeans.
CNBC initially broke the story on August 11, reporting that President Trump had signed an executive order extending the tariff ceasefire for another 90 days. This came shortly after Trump told reporters that “we’ll see what happens” regarding an extension. The White House then announced that the president had signed a directive to maintain the temporary US-China trade agreement.
“I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days. All other elements of the Agreement will remain the same,” Trump said on Truth Social. “Thank you for your attention to this matter! DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA.”
While Treasury Secretary Scott Bessent has stated that the objective now is to rebalance trade between the world’s two largest economies – with the United States as a top producer and China as the leading consumer – Trump might have signaled that the next round of negotiations could focus on soybeans. The world saw this before during the US-Japan talks, whereby Trump accused Tokyo of not purchasing American rice despite facing supply challenges.
So, soybeans it is? This appears to be the next stage in discussions stemming from the president’s social media activity.
In an August 10 Truth Social post, President Trump signaled that he wants China to bolster its imports of US soybeans. “China is worried about its shortage of soybeans. Our great farmers produce the most robust soybeans,” Trump wrote on the social media platform. “I hope China will quickly quadruple its soybean orders. This is also a way of substantially reducing China’s trade deficit with the USA. Rapid service will be provided.”
Last year, the US goods trade deficit with China was nearly $300 billion. The president’s tariffs have significantly reduced the trade gap this year. In June, the overall trade deficit with Beijing was $9.5 billion, down by approximately $21 billion in the previous month, according to the Bureau of Economic Analysis.
This harkens back to 2019 and 2020, when both sides finalized the Phase One trade deal. The agreement included a provision under which China would purchase $32 billion worth of US agricultural products over two years, with a focus on soybeans. The coronavirus pandemic disrupted the pact and, ultimately, China fell short of the targets set by the first Trump administration.
China is the world’s largest importer of soybeans, accounting for two-thirds of worldwide imports. In addition, according to the US Department of Agriculture, Beijing is also America’s biggest soybean customer, buying almost $13 billion last year. The speculation, of course, sent soybean prices soaring to start the trading week, climbing more than 2% to firmly above $10 a bushel on the Chicago Board of Trade.
As Liberty Nation News reported, the next stage in the administration’s trade agenda consists of implementing tariffs on semiconductors and pharmaceuticals. Additional trade deals could also be in the works as 66 countries attempt to reduce their US tariff rates. Mexico is a few days into the 90-day extension, while talks with Canada appear to have stalled. Suffice it to say, it is a waiting game, with investors and policymakers bracing for inflation data that may or may not confirm that levies are reviving price pressures.