European Union countries are expected to approve on Wednesday a set of reprisals in the United States in response to President Donald Trump’s radical rates on American trade partners.
The expected tit-form comes when China also retaliated against Trump’s prices this week. The course price has destabilized the global markets and given stocks fall into all areas.
Trump’s latest rates put a 20% sample on all EU products. The rate rate is 104% for Chinese products.
EU actions will target American aluminum and steel products, as well as American agricultural imports – keys among them being soy.
Could one of the largest imports in America in the world prove to be the Washington Achilles heel that business partners, including EU and China, use to run up effectively?
Here is what you need to know about what soy trade war could mean – and why it could be a big problem for the United States, economically and politically:
Why is soy so important for the United States?
Soy, in the form of whole beans, animal food or oil, is the cornerstone of the American agricultural industry and represents one of the largest wages of agricultural income in America.
It represents approximately 0.6% of GDP. The United States have Over 500,000 soy producersAccording to the census of agriculture from the Ministry of Agriculture. This includes at least 223,000 full -time jobs supported by the soybean industry, according to a 2023 report for the National Oilseed Processors Association and the United Soybean Board.
The industry is worth $ 124 billion in the United States – it’s more than the whole economy of Kenya or Bulgaria.
Although the local soy demand in the United States is increasing, exports are the basis for the success of the harvest. The United States is currently the second largest soy exporter in the world, selling more than half of its yield to around 80 countries.
To whom the United States exports soybeans?
Soy has contributed more than $ 27 billion in American annual exports in 2023, according to data from the Economic Complexity Observatory (OEC), an open source data visualization platform.
It is more than any other agricultural export.
China, which imports $ 15 billion in American soybeans, is by far the largest market, followed by the EU – and in particular Germany, Spain and the Netherlands, which buy about $ 2 billion in oil.
However, China and the EU are now at the heart of a global decline against Trump’s prices. They both appeared on the list of “worst offenders” of countries affected by a tariff increases announced by Trump last week. The list included countries that Washington claimed unjustly experienced American goods in their country.
Trump slapped the EU with an additional 20% supplement, apart from 25% of steel and aluminum samples, which form a key element of the block exports to the United States.
China, in total, is now facing a 104% rate on all of its American exports from Wednesday.
Will the EU and China retaliate with prices on soybeans?
The two entities seem to target American soybeans, a weakness for Washington, given the importance of their markets for American farmers.
The EU has promised to target American goods of a value of up to 26 billion euros ($ 28 billion) in reprisals.
Although these prices should be applied in phases, one of the products on the EU list is soy.
The block will vote on a surcharge of up to 25% on a list of goods targeted on Wednesday, without any opposition provided. A first series of prices will be applied from April 15.
Meanwhile, American soy exports to China, its largest market, are also faced with a battery. China had previously perfected American food products, slapping a 15% function on products such as chicken, wheat and corn, while imposing a 10% sample on soy, meat and other agricultural exports.
On Saturday, China placed 34% additional on all American products, relating to the soy supplement, in particular, at 44%. Another increase of 50% on all American products will take effect Beijing announced on Thursday.
This means that American soy will now face 94% prices in China.
Experts say that China can afford to play with soybeans, because it has turned more and more to Brazil for its soybells since 2017, when the First Trade War began in the first administration of Trump.
Soy-in-law exports to the United States to China have fallen over time since, while Brazil now has more than half of the market share. In 2024, Brazil exported $ 36.6 billion from soy to China while the United States exported a value of $ 12.1 billion in soybeans.
How do we react to us soybeans?
American soybeans have urged Trump to remove prices on China, the EU and other main markets such as Mexico. Most highlighted the importance of China for American farmers.
“China bought 52% of our exports (soy) in 2024,” said Scott Gerlt, chief economist of American Soybean Association, at the AFP press agency. Given the size of its purchases, China cannot be easily replaced, he added.
Some farmers say that many will not be able to last too long if the commercial spit continues, because their products would become too expensive to be competitive on the world market.
“If this trade war lasts beyond fall, you will see the farmers go bankrupt,” said soy farmer David Walton to Us News Channel ABC.
What could be the political implications?
The war against soybeans, and indeed, the tariff row of the Tat-Tat, could have profound political implications.
So far, Trump has issued policies as executive decrees, refusing to congress the right to weigh on the issue.
But the member of the Republican Congress Don Bacon, the Republican Senator Chuck Grassley and Democratic Senator Maria Cantwell are preparing to introduce legislation that would oblige Trump to inform the congress of any new price, with his application subject to the approval of the Chamber, according to reports by American publications Politico and Axios. The chances that the bill will pass is slim, because the Republicans dominate the Chamber and the Senate.
However, whatever happens at Congress, the political consequences could also feel beyond Capitol Hill.
Almost all American soy exports to the EU come from Louisiana, the original state of republican president Mike Johnson. The politician nevertheless spoke in favor of pricing hikes.
In a press release last week, Johnson said that the Americans should “trust the president’s instinct on the economy.”
“It may be difficult at first, but I think in the end, it will make sense to all Americans, it will help all Americans,” he said.
