Trump backs Milei with $20 billion, China buys Argentine soy beans and U.S. farmers are left behind

China took full advantage of last week’s move by the Argentinean government to suspend export taxes on key agricultural products such as soy, corn, oilseeds, wheat and their by-products.

Earlier this summer, President Javier Milei’s government announced a permanent reduction in agri-export taxes, with the rate for soybeans dropping from 33% to 26%, and soy by-products reduced to 24.5% from 31%.

Argentina freezes agri-export taxes for two days

On September 22, Argentina scrapped agri-export taxes completely - a maneuver designed to speed up sales abroad and boost their flagging economy. The tax freeze was valid until October 31 but reinstated after just two days as the country reached the $7 billion cap.

Chinese buyers reacted immediately, ordering 42 shipments of Argentine soy—a total of 2.7 million metric tons, scheduled for November.

China’s spending spree helped Beijing reduce its reliance on US soy and added pressure to prices on the Chicago Board of Trade (CBOT) with US soybean futures dropping half a dollar to $10.09 per bushel.

With export taxes suspended, China ended up paying $2.15-$2.30 per bushel according to market insiders.

While Chinese traders and Argentina’s government will be more than happy with the outcome, it signals more bad news for US farmers, who are already suffering as orders from China dry up.

And the doom and gloom doesn’t stop there - China has now amassed enough soy to meet demand until Brazil’s soybean harvest in February, which is forecast to be a bumper 173 million metric tons - setting a new domestic record and a 2% increase on last year’s production figures.

Farmers hit as China gives the US the cold shoulder

“Every time China turns to South America instead of the U.S., soybean farmers and our farm families here at home lose out,” Caleb Ragland, a farmer and president of the American Soybean Association told Reuters. “Without a trade deal that removes retaliatory tariffs, farmers like me are left watching key opportunities slip away.”

China appears to be turning to South America for soybean purchases and actively avoiding the US, who previously sold 12-13 million tons’ worth of soy to Beijing for September-November shipment.

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