U.S. President Donald Trump's trade war with China is reverberating far beyond American borders, and Argentina is feeling the strain. While Chinese demand for soybeans has fueled a surge in Argentine exports, this unexpected boom has placed immense pressure on the country's soy crushing industry, which transforms soybeans into higher-value products like meal and oil.

According to CIARA-CEC, Argentina's national chamber of grain exporters and processors, idle capacity at crushing plants rose to 31% in July-and has continued climbing. That's an alarming trend in a country known as one of the world's top soy processing hubs.

"Frankly, as an oilseed industry, we are concerned," said Gustavo Idigoras, president of CIARA-CEC. "This means fewer Argentine jobs and lower export value. This trade war has not brought benefits to Argentina; it has brought harm."

The trade conflict between the U.S. and China, initiated under the Trump administration, prompted Beijing to reduce its dependency on American soy. China has increasingly turned to South American suppliers, particularly Argentina and Brazil, to meet its import needs.

As a result, Argentina's 2024/25 unprocessed soybean exports surged to 8.81 million metric tons, a six-year high. Nearly a third of the country's harvest remains unsold, indicating that total raw exports could nearly double last year's figure of 4.7 million metric tons.

However, this volume shift has come at a cost. Local crushers, which rely on domestic supply, are struggling to source enough soybeans to maintain operations. That has resulted in reduced industrial activity, layoffs, and a diminished value chain that once made Argentina a leader in processed soy exports.

"This export boom is being fueled by new demand from China that stems directly from its trade war with the United States," Idigoras explained. "China buys the raw beans to process them domestically, which means we are exporting jobs and value-added potential."

Adding to the challenge, the trade dynamics have caused a glut of soy in the U.S., enabling American soymeal to compete aggressively in global markets-particularly in Southeast Asia, where Argentina has traditionally held a strong position.

This shift in global supply chains underscores the complex ripple effects of trade policy. While Argentine producers benefit from strong commodity prices and foreign demand, the national industry loses competitiveness when raw materials bypass local processing.

Looking ahead, the sector's fate may depend on international negotiations. "The future of our bean exports will be decided by what happens between China and the United States," Idigoras said. "All eyes are on November, when the current trade waiver between them expires."

For U.S. agriculture professionals, this evolving scenario holds key implications. A constrained Argentine crushing industry could boost demand for U.S. soymeal exports, creating new opportunities in Asian markets. Meanwhile, shifting trade flows and supply imbalances could affect global commodity pricing, input costs, and investment strategies tied to soy-related infrastructure.

As the geopolitical chessboard continues to reshape agricultural markets, the fallout from a years-old trade war continues to unfold-from Washington to Buenos Aires, and far beyond.