European Union countries approved a series of retaliatory taxes in the United States on Wednesday in response to President Donald Trump’s sweeping tariffs on American trading partners.
TAT’s TIT, which comes into effect on April 15, is due to China retaliation against Trump’s tariffs this week. The unfolding tariff spat has destabilized the global market and stocks are falling completely.
Trump’s latest tariffs are levied at 20% on all EU goods. The tariff rate is 104% for Chinese products.
EU actions, like US agricultural imports, will target our aluminum and steel products (soybean beans), but these tariffs could be rolled out in stages.
Can Soya prove that one of the world’s largest imports is Washington’s Achilles heels used by trading partners, including the EU and China, to effectively return?
What should we know here about what the soy trade war means and why it could be a big deal economically and politically:
Why is soybeans so important to the US?
Soybeans, in the form of whole beans, animal feed or oil, are the cornerstone of the US agricultural industry and one of America’s largest farm income earners.
It accounts for about 0.6% of GDP. According to the Department of Agriculture Agricultural Census, there are over 500,000 soybean producers in the United States. This includes at least 223,000 full-time jobs supported by the Soya Bean industry, according to a 2023 report from the National Oilseed Processors Association and the United Soybean Board.
The industry is worth $124 billion in the US. This goes beyond the entire economy of Kenya and Bulgaria.
Although local demand for soybeans in the US is growing, exports are the basis for successful crops. The US is currently the second largest exporter of soybeans worldwide, selling more than half of its yield to around 80 countries.
Who does the US export beans to?
Soya Beans provided over $27 billion in US annual exports in 2023, according to data from the Observatory of Economic Complexity (OEC), an open-source data visualization platform.
It’s more than any other agricultural export.
China, which imports US soybeans for $15 billion, is the most important market for the EU, particularly Germany, Spain and the Netherlands, to purchase approximately $2 billion worth of oil.
But both China and the EU are now at the heart of a global pushback to Trump’s tariffs. They were both on the country’s “worst criminals” list that was hit by the tariff hike barrage announced by Trump last week. The list included countries that Washington allegedly claimed were countries that were unfairly taxed on their own US goods.
Trump slapped the EU for an additional 20% charge, excluding 25% collection for steel and aluminum.
China is currently facing 104% tariffs on all US exports as of Wednesday.
Will the EU and China retaliate with soybean tariffs?
Both entities appear to target our soybeans, a soft spot for Washington, given the importance of the market for American farmers.
The EU has previously committed to targeting US goods up to 26 billion euros ($28 billion) in retaliatory tariffs. The full list draft was previously leaked, but has not been officially released.
On Wednesday, Block voted for an additional fee of up to 25% on the list of target products. The first customs set will come into effect from April 15th.
These tariffs are expected to be enforced in stages, but one of the products on the EU list is soybeans.
Meanwhile, exports of US soybeans to China, the largest market, are also facing abuse. China previously polished US food, imposing a 15% obligation on goods such as chicken, wheat and corn, and 10% collection on soybeans, meat and other farm exports.
On Saturday, China placed an additional 34% on all US products, bringing the extra charge for soybeans, especially at 44%. Beijing announced an additional 50% increase in all US products will come into effect Thursday.
This means that American soybeans face 94% tariffs in China.
Experts say China can afford to gamble along with soybeans. Because since 2017, when the first trade war began in Trump’s first administration, it has been increasingly heading towards Brazil for soybean imports.
Brazil currently has a decline in US exports to China at that time, but it currently holds more than half its market share. In 2024, Brazil exported $36.6 billion worth of soybeans to China, and the US exported $12.1 billion worth of soybeans.
How do our soybean farmers respond?
https://x.com/asa_soya beans/status/1909613301564112985
American soybean farmers are urging Trump to remove tariffs in other top markets like China, the EU and Mexico. Most people emphasize the importance of China to American farmers.
“China acquired 52% of our (soybean) exports in 2024,” Scott Gerd, chief economist of the American Soybean Association, told AFP News. Given the size of the purchase, China cannot be easily replaced, he added.
Some farmers say that if trade continues, many people can’t do it too long. Because their produce is too expensive to be competitive in the global market.
“If this trade war continues beyond the fall, we will see farmers go out of business,” Soya Bean farmer David Walton told news channel ABC.
What is the political meaning?
The war with soybeans, and indeed, the tart tariff sequence, can have deep political implications.
So far, Trump has issued policies as an enforcement order, denying Congress the right to consider the issue.
But Republican Rep. Don Bacon, Republican Sen. Chuck Grassley and Democrat Sen. Maria Cantwell are preparing to introduce legislation that forces Trump to notify Congress of new tariffs, subject to House approval, according to reports from US publications. With Republicans controlling the House and Senate, there is a small chance that the bill will pass.
Still, no matter what happens in Congress, the political outcome may be felt beyond Capitol Hill.
Almost all American soybeans exports to the EU come from Louisiana, the hometown of Republican House Speaker Mike Johnson. Nevertheless, politicians are spoken in favor of hiking tariffs.
At a press conference last week, Johnson said Americans should “trust the president’s instincts about the economy.”
“It might be Rocky at first, but I think it makes sense for all Americans in the end. It’s going to help all Americans,” he said.
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