As the U.S. soybean harvest ramps up this September, American growers are entering the season with a troubling reality: no confirmed Chinese purchases. China, the largest global importer of soybeans, typically buys over half of all U.S. soybean exports. But this year, the silence is stark.

From January through August 2025, U.S. soybean exports to China totaled only 218 million bushels, down sharply from the nearly 985 million bushels sent in all of 2024. Even more alarming: zero shipments occurred in June, July, and August. Tariffs and geopolitical tensions are largely to blame.

A combination of a 20% retaliatory tariff, along with China's Value-Added Tax (VAT) and Most-Favored-Nation (MFN) duties, has driven the total duty rate on U.S. soybeans to 34% in 2025. This makes American beans less competitive compared to South American alternatives.

The American Soybean Association has voiced concern, noting in a recent letter to the White House that these tariffs are effectively pricing U.S. soybeans out of the Chinese market. With the harvest already underway and storage space limited, farmers are anxious. A record corn harvest expected to surpass 16 billion bushels only adds to the strain on storage infrastructure, especially in the Midwest.

While the U.S. waits, Brazil is booming. From January to August 2025, Brazil exported a record 2.474 billion bushels of soybeans to China. This represents 76% of Brazil's soybean exports, with August alone setting a monthly record at 290 million bushels. China bought 85% of Brazil's total soybean exports that month.

This level of demand recalls the 2018 trade war, but the stakes are higher now. Since then, Brazil's production has grown 40%, jumping from 4.5 billion to 6.3 billion bushels between the 2017/18 and 2024/25 seasons. That expansion has helped Brazil absorb Chinese demand, particularly as U.S. exports stall.

China's total soybean imports hit a record 451 million bushels in August, almost entirely sourced from Brazil. For the May-August period, China imported 1.837 billion bushels, with 90% coming from Brazil. These flows are reshaping global trade.

As U.S. prices fall due to weaker demand, Brazilian soybean prices are climbing, boosted by strong Chinese buying and favorable port premiums. Despite a record harvest ending in May, export premiums at Brazilian ports remain high-offsetting weaker global prices and currency fluctuations.

Globally, China accounts for roughly 60% of soybean imports. In 2024, China bought 23% of U.S. soybean production and 48% of Brazil's. However, U.S. market share has been in decline. From 2011 to 2017, China averaged 60% of U.S. soybean exports. That figure dropped to 47% from 2018 to 2024. In contrast, Brazil's share rose from 73% to 74% over the same span.

U.S. market erosion stems not only from trade disputes but also rising domestic demand. Since 2020, soybean crush capacity has expanded, largely due to demand for soybean oil in renewable diesel production. This shift is absorbing a greater portion of the U.S. crop internally.

Brazil has followed suit, growing both biodiesel output and soybean acreage, largely by converting degraded pastureland in the Cerrado into cropland. Studies suggest up to 70 million acres of pasture could be converted, ensuring Brazil's supply advantage for years.

If no trade deal is reached this fall, U.S. farmers could face heavy losses. Input costs remain high, and with falling prices, many may opt to store soybeans, putting stress on the broader grain supply chain. Financial pressure may impact loan repayments, planting decisions for 2026, and capital investment.

Meanwhile, Argentina is entering the race. With export taxes suspended through October 31, Argentine soybeans and byproducts are poised to capture more of the Chinese market. As the third-largest soybean exporter and top meal/oil supplier, Argentina's move further complicates U.S. prospects.

In this tense trade environment, South America is gaining ground. Without resolution, the U.S. risks a loterm loss of market share and weakened influence in global agriculture.