China to cut tariffs on US farm goods, but list excludes soybeans

By Ella Cao, Naveen Thukral and Lewis Jackson

BEIJING/SINGAPORE, Sept 28 (Reuters) - China is set to cut tariffs on a broad range of US agricultural goods, from corn and wheat to meat and dairy, but top import item soybeans were excluded from a tariff-reduction list its commerce ministry issued on Monday.

Markets have been waiting for news on Chinese tariff cuts on US farm goods following last week's Washington summit of leaders Xi Jinping and Donald Trump.

The list covers sorghum, vegetable oils and meals, including soyoil and soymeal, along with meat, dairy products and other items.

US soybeans, however, still face an additional tariff of 10%, which traders have warned is too high for private crushers to absorb, even as Chinese state buyers have stepped up purchases.

"Despite the soybean being a non-sensitive item in trade, the political significance of China's soybean purchase is enormous and carries major political implications," said Feng Chucheng, founder and partner at Hutong Research.

"Hence a separate track on soybean purchase outside the Board of Trade. This also gives Beijing a leverage to restrain US actions, especially ahead of the midterm elections."

Both sides have agreed to form a trade council, whose first task will be to discuss a reciprocal tariff cut on $30 billion worth of products, in a bid to ensure stable economic and trade ties.

Chinese state-run agricultural companies Sinograin and COFCO have bought more than 12 million metric tons of US soybeans, nearly half the 25 million the White House has said Beijing committed to buying annually through 2028.

Trade in the agricultural and related products on Monday's list stood at about $17 billion in 2024, roughly matching China's reported purchase commitment, excluding soybeans, according to Reuters calculations.

In May, the White House said Beijing had agreed to buy that volume annually through 2028, but China has yet to confirm any target for such purchases.

State-run companies will continue to buy US soybeans and the tariff cuts on other goods will help China meet the $17 billion commitment, said a trader based in Asia with an international company that sells soybeans to China who spoke on condition of anonymity.

The trader added US soybeans are not very competitive on price even if the tariffs were lowered.