Argentina’s Tax Break Draws U.S. Soybean Market Share Away in China

American soybean growers are voicing significant concern as Argentina’s latest economic policies and export tax reductions have heightened global competition, making it harder for U.S. producers to sell to China, the world’s top soybean buyer. The U.S. Treasury’s proposal for a $20 billion currency swap with Argentina’s central bank, together with Argentina’s removal of export taxes on soybeans, has allowed Argentina to quickly secure 20 major soybean shipments to China, according to several traders. These changes have worsened the situation for U.S. farmers, who are already dealing with a 34% effective tariff on soybean exports to China and a 40% price drop since 2022.

The American Soybean Association (ASA) pointed out the irony that while U.S. farmers are busy harvesting, government financial backing for Argentina coincided with Argentina’s tax-free soybean exports to China, pushing U.S. soybeans out of the market. In 2024, soybeans made up 20% of U.S. cash crop income, totaling $46.8 billion, with China historically buying 51% of U.S. soybean exports. But this year, from January to August 2025, only 29% of U.S. soybean exports went to China, down from 51% in 2024. Meanwhile, Brazil now supplies 71% of China’s soybean imports, a dramatic increase from just 2% thirty years ago, further weakening the U.S. position.

The economic fallout is especially severe in rural America, where soybean farming accounts for 20% of jobs in many farming counties. As global demand for U.S. soybeans drops, excess supply has pushed prices lower. In the Midwest, soybeans are typically shipped to Pacific Northwest ports for export, but with fewer shipments, farmers are facing storage and transport challenges. Minnesota farmer Kyle Jore shared that many growers are forced to sell to cooperatives at prices below the market, leading to heavy losses. Agricultural economist Ryan Loy warned of “ripple effects” in rural areas, where business closures and population decline could follow as farms struggle financially.

This current turmoil is reminiscent of the 2018 U.S.-China trade dispute, when American soybean producers lost $27 billion in exports. A 2022 USDA study showed that the U.S. share of China’s soybean imports fell to a 30-year low of 19%, while Brazil’s share climbed to 75%. Although U.S. farmers have expanded into markets like the European Union, they still depend heavily on China, and rising costs for equipment and fertilizer—due to tariffs—have squeezed profits even more.

To help, the U.S. government has suggested using tariff revenues to fund farm subsidies, a tactic used during the 2018 trade conflict. However, experts warn that while such support can help in the short term, it does not solve long-term competitiveness issues. The Illinois Soybean Association has launched projects like the Soy Innovation Center to expand domestic uses for soybeans, but farmers stress that stable trade relationships are more important than government aid. “We want markets, not handouts,” said Todd Main of the Illinois Soybean Association.

This situation highlights how interconnected global commodity markets are, with policy changes in one country quickly affecting others. As Argentina’s tax break coincides with the U.S. harvest, farmers and industry leaders are watching export levels, prices, and diplomatic moves between Washington and Buenos Aires closely. With Argentina’s economic reforms and China’s changing buying habits, U.S. soybean growers face an uncertain future, depending on resolving trade disputes and adapting strategies to stay competitive worldwide.