COFCO, China’s largest state-owned agriculture and meals enterprise, simply purchased its first buy of U.S. soybeans from this yr’s harvest proper earlier than President Donald Trump and Xi Jinping meet at an financial summit in South Korea this week.
The agency performs a key position within the world provide and commerce of grains, oils, and meals merchandise, with its core buying and selling arm, COFCO Worldwide, reporting $38.5 billion in income final yr, or 108.4 million metric tons of agricultural crops and commodities. It additionally simply put in a purchase order order for 180,000 metric tons of U.S. soybeans for a December and January cargo, Reuters first reported on Tuesday, citing two oilseed merchants. This marks China’s first buy of U.S. soybeans in months.
COFCO didn’t instantly reply to Fortune’s request for remark.
Specialists with information on the transaction instructed Reuters that the acquisition quantity was small, solely amounting to three cargoes, or shiploads, of soybeans, and that demand for the crop from the U.S. isn’t anticipated to considerably enhance within the close to future after current massive purchases from South America.
China accounts for about 60% of the world’s soybean imports, and in 2024 China made up 51% of U.S. soybean exports. However commerce tensions have pushed a wedge between the U.S., which is the second-largest producer of soybeans, and China—one so massive that China had not beforehand put in any orders to any of the nation’s 500,000 U.S. soybean growers’ autumn harvests. In impact, farmers in rural America have warned of an impending financial disaster from the compounding components of dropping their prime export market, falling crop costs and excessive prices.
However Trump and China’s president are slated to fulfill for talks round commerce and tariffs on Thursday, throughout the Asia-Pacific Financial Cooperation (APEC) Summit in Busan, South Korea.
The deliberate talks come after Treasury Secretary Scott Bessent hinted at a de-escalation within the commerce battle between the nations underneath a deal framework he negotiated. In an interview aired Sunday on CBS Information’ Face the Nation with Margaret Brennan, Bessent mentioned the extra 100% tariff on China that Trump threatened earlier this month is “successfully off the desk.”
The 100% tariff risk adopted China’s announcement of the strictest export controls to this point, together with a ban on any uncommon earths for overseas navy use and a requirement for overseas entities to acquire Chinese language authorities approval on merchandise containing even hint quantities of Chinese language-sourced uncommon earths. The U.S. makes use of uncommon earths for navy functions and AI improvement.
“So I’d anticipate that the specter of the 100% has gone away, as has the specter of the fast imposition of the Chinese language initiating a worldwide export management regime,” he mentioned.
Bessent declined to present particular particulars to CBS in regards to the commerce settlement, however mentioned soybean farmers will probably be “extraordinarily proud of this deal for this yr and for the approaching years,” and offered a constructive outlook for U.S. soybean exporters.
“I imagine that now we have introduced the market again into equilibrium, and I imagine that the Chinese language will probably be making substantial purchases once more,” Bessent mentioned.
“Leverage diplomacy”
Babak Hafezi, adjunct professor internațional enterprise at American College, instructed Fortune negotiations between China and the U.S. have been marked by “leverage diplomacy.”
“The Chinese language understood that they might not renegotiate except that they had leverage, and so they used rare-earth minerals as a key lever, bringing the U.S. to the desk,” Hafezi mentioned.
After the transfer in mid-October, negotiations started to maneuver a lot quicker, together with the U.S.’ requirement to buy soybeans that COFCO has not bought this yr, he added.
“It is a quid professional quo within the negotiation course of and helps us stabilize relations with China extra shortly,” Hafezi mentioned.
