US-China negotiations: Possibility of an agreement and impacts on agriculture

The current US-China negotiation scenario has profound repercussions on global trade and on the agricultural sector. The trade dispute between the world's two largest economies, which has manifested itself in a tariff war, has led to changes in geopolitics and the commodities market. Considering this, discussions about a possible agreement between the United States and China are gaining prominence, with potential significant impacts on Brazilian agriculture. 

In this article, we will explore: 

• The US-China trade relationship and relevance for agribusiness;
• The impacts of the 2018 truce on the trade dispute;
• The current scenario of the trade dispute between the US and China; 
• Possible impacts of an agreement on the agricultural market;
• The results of the US-China negotiations for Brazil;
• Future paths and the uncertainties involved in reaching a possible agreement.

Enjoy your reading! 

Why is the trade relationship between the US and China important for global agriculture? 

The trade relationship between the US and China, the two largest economies on the planet, determines global trade flows and commodity prices, particularly soybeans. China is the largest importer of oilseeds, while the US is among the leading producers and exporters. Before the trade war, China purchased more than half of all soybeans exported by the US. In some harvests, purchases reached 70% of exports, demonstrating the importance of the relationship. This interdependence directly affects prices and logistics in the agricultural sector worldwide. 

This model was built throughout the 1980s when US government delegations took to China the advantages of including soybean meal in pig feed. At that time, the Chinese government saw an opportunity for industrialization, building soybean crushing plants in clusters in the country's ports to receive imported soybeans, crush them, and send the meal to the interior of the country for use in animal feed. 

For decades, this relationship flourished and attracted the interest of other countries seeking to take advantage of China's increased soybean consumption, a direct reflection of the expansion of the pig herd in the Asian powerhouse. It was in this scenario that Brazil gained prominence, establishing a strategic alternation with the United States in the supply of soybeans to China. 

Given this scenario, it is clear that soybean exports play an important role in the US agricultural market, accounting for about 18% of total agricultural exports from the United States. Any interruption or restriction in this trade flow generates chain effects, such as the redirection of Chinese purchases to other suppliers. For this reason, the agricultural sector is among the most sensitive to geopolitical tensions between the two nations. 

How did the 2018 truce affect the trade dispute? 

In 2018, the United States and China began an intense trade dispute marked by tariffs and counter-tariffs. That year, during Donald Trump's first term in office, the “Make America Great Again” program was launched. By November 2018, the US had already imposed tariffs on approximately US$ 250 billion worth of Chinese products, while China retaliated with tariffs on US$ 110 billion worth of American goods. 

Faced with rising tensions, in December 2018, the presidents of the two countries met during the G20 summit in Buenos Aires. The result was a temporary 90-day truce, while the two nations sought to negotiate a broader agreement. During this period, China committed to increasing its purchases of US agricultural, energy, and industrial products, while the US suspended the additional tariff increases that had been planned for the beginning of the following year. 

Despite the negotiations, a broad consensus was not reached, and tariffs rose again in the following months, accompanied by new countermeasures on both sides, in a context of geopolitical and technological conflict. 

US-China technology dispute 

In 2015, China launched the “Made in China 2025” plan, aiming to consolidate its leadership in strategic sectors such as robotics, semiconductors, and artificial intelligence. The US began to see the program as a threat to its technological supremacy and accused Beijing of unfair practices, including state subsidies, forced technology transfer, and barriers to foreign investment. In response, it imposed restrictions on Chinese companies and limited investments in sensitive sectors, extending the rivalry beyond tariffs. 

What is the current state of the trade dispute between the US and China? 

The current state of the dispute between the United States and China remains marked by trade and technological tensions. Since 2018, the tariff war has evolved into a broader clash involving strategic supply chains, technology, and geopolitical leadership. 

In recent years, the two countries have been trying to stabilize their relationship through specific agreements. In 2025, US Secretary of Commerce Howard Lutnick announced that the two countries had reached a partial agreement on rare earths and strategic minerals, essential inputs for sectors such as defense, electronics, and electric batteries. The agreement provides for the acceleration of Chinese exports of these materials, while the US may suspend some restrictive measures, conditional on China's compliance with its commitments. However, the presidents of the two powers have been exchanging threats and praise, increasing uncertainty about when the conversation between them will take place and what a possible agreement between them might look like. 

The trade dispute also directly influences the agricultural commodities market, especially soybeans, as China is a major importer of this product. 

Despite occasional progress in the negotiations, the impasse remains. The US government continues to push for greater access to the Chinese market and limits on subsidies and practices considered unfair, while the Chinese government seeks to preserve its technological autonomy. Analysts point out that the current dispute is less about specific tariffs and more about control of strategic technologies and influence in global value chains. 

What are the possible impacts of a new agreement between the US and China on the agricultural market? 

A new agreement between the US and China could benefit the American agricultural sector, especially soybeans. China suspended purchases of American soybeans in 2025 after the US imposed tariffs. In February 2025, the Trump administration increased tariffs on Chinese products by 10%, rising to 20% in March of the same year, 34% in April, and then 145%. In response, China imposed tariffs of 10 to 15% on US agricultural products, retaliating in April by announcing a tariff of 34% and then 125%. In May, a 90-day truce began, extended in August for another 90 days. In October, the market awaits new talks between the two leaders, with the US government announcing 130% tariffs on China starting November 1. 

As a result, US soybean exports to China fell sharply. In September 2025, Chinese purchases of US soybeans were virtually nil, compared to US$12.6 billion the previous year. 

The resumption of Chinese purchases of US soybeans would help ease pressure on domestic prices and stocks. However, China is diversifying its suppliers, covering a large part of its purchasing program. The resumption of negotiations could also influence other commodity markets, such as corn. 

How will the negotiation of an agreement between the US and China affect Brazilian agriculture? 

A new agreement between the United States and China could significantly affect Brazilian agribusiness. During the trade war, China redirected its purchases of soybeans, corn, and meat to other suppliers, benefiting Brazil in particular, which increased exports and took advantage of higher international prices. A study by UFMG estimates that the Brazilian Midwest had a potential gain of R$ 6.94 billion in regional GDP, while states such as Bahia, Maranhão, and Piauí also recorded positive impacts with increased foreign sales. 

If the two countries sign a new agreement that resumes Chinese purchases of US agricultural products, Brazil may face greater competition in the Chinese market, its main destination for soybean exports. This could put pressure on premiums at Brazilian ports and reduce Brazil's share of exports to China, especially during periods of record US harvests.  

What are the future paths and uncertainties for a new agreement? 

The United States and China have intensified negotiations to try to reach a new trade agreement. President Donald Trump announced that he intends to meet with President Xi Jinping during the APEC summit at the end of October 2025, with soybeans among the topics on the agenda. The temporary suspension of tariffs imposed by the United States expires in early November, which increases the pressure for an agreement. 

There is uncertainty as to whether China will resume importing large volumes of American soybeans, as it has been diversifying its suppliers, such as Brazil and Argentina. Another open question is the scope of the agreement. The Chinese government is pushing for the suspension of restrictions on exports of semiconductors and advanced technologies, while the US is seeking access to rare earths, which could prolong negotiations. 

Understand the scenario and protect your business 

In a scenario of uncertainty, especially considering the negotiations between the US and China, it is essential to have effective protection strategies in place. Hedgepoint offers detailed market data and analysis, combined with hedging tools, which help protect against volatility and contribute to more efficient risk management.  

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