April 28, 2025

China's retaliatory tariffs on US soybean stir concerns of cost for Chinese hog farmers

 

 

Hog farmers are bracing for costs to soar after China slapped a 135% tariff on imports of US soybeans, a key ingredient of animal feed, even as Beijing looks to producers like Brazil to meet its demand for the legume amid a greater push for self-sufficiency.

 

Soybeans – which feed the production of China's 435-million-strong pig industry – remains the United States' top agricultural export, selling more than 27 million metric tons or over half of the $24.6 billion in total US agricultural products Beijing imported in 2024.

 

The steep tariff hikes on agricultural products like soybeans and corn, both major components of hog feed, will drive up the cost of breeding livestock and translate into higher food prices for ordinary consumers for China – the world's largest producer and consumer of pork, industry insiders said.

 

On April 11, China announced 125% tariffs on US imports, in retaliation to US President Donald Trump's increase of duties on Chinese imports to 145%. With this, the total tariff on US soybean imports rose to 135%, after adding in the 10% duty China imposed on certain US agricultural products in March.

 

At an estimated 125% tariff hike, the CIF – cost, insurance, and freight – price of US soybean imports will rise to US$1,026 per metric ton, nearly double that of Brazilian soybeans at about US$580 per metric ton, prompting China to increase its soybean shipments from Brazil, said the derivatives marketplace operator, CME Group.

 

Ever since the world's two largest economies engaged in an earlier trade war in 2018 during Donald Trump's first term as US president, China has been turning to countries like Brazil to meet its demand for farm goods. It has also made a push for more self-sufficiency, reducing its reliance on imports of US agricultural products.

 

Today, China has significantly increased its reliance on Brazil, the world's top soybean producer, importing 72.5 million metric tons of Brazilian soybeans in 2024, up from 19 million metric tons in 2010. In comparison, US soybean imports stood at 27.2 million metric tons in 2024, largely unchanged from its 2010 levels.

 

China is now making a similar push to import more of the protein- and oil-rich seeds from Brazil to meet the demand of its hog industry, but hog farmers believe this won't be enough to stem the impact of high tariffs on US agricultural imports.

 

"For soybeans and corn, they (the government) can import from wherever they want. We ordinary people have no choice," said Sun Jun, a hog farmer in China's southwestern province of Sichuan.

 

The composition of soybeans and corn is high in feed for livestock, including pigs, poultry, and cattle.

 

Sun estimates that an animal feed weighing 100 kilogrammes (220.5 pounds) would typically contain around 25 kilogrammes (55 pounds) of corn and wheat, and 20 kilogrammes (44 pounds) of soybean meal, a by-product of oil extraction from soybean seeds.

 

"Once the price rises, it will directly push up the breeding cost," said Sun.

 

Sun now buys about three metric tons of hog feed every month, which costs about ¥14,000 (US$1,915) per month, he said. That's already a one-third increase from an estimated ¥10,500 (US$1,436) in cost he would have incurred for the same amount of hog feed a week earlier, based on the price of ¥3.46 (49 US cents) per kilogramme (2.2 pounds), as listed by Chengdu Development and Reform Committee then.

 

The impact of rising feed costs will be felt by ordinary consumers through higher food and meat prices, said industry insiders.

 

"The breeding costs of the livestock industry are already very high … The price of meat (as a result) has been rising for more than half a month and is bound to increase," Lu, a resident of Linyi, Shandong, told RFA.

 

"The tariff increase will ultimately be borne by consumers," she added.

 

From a macro perspective, China remains highly dependent on agricultural product imports, said Li Qiang, who previously worked at the Agricultural Product Pricing Bureau.

 

"25% of the food needed by mainlanders depends on imports, and mainly comes from the United States, mainly wheat and soybeans," added Li, who is a resident of Qingdao prefecture-level city in Shandong province.

 

Shandong, which is a key player in China's hog breeding industry, has seen the construction of multi-story pig farms that are at the center of the country's efforts to ramp up domestic production to cut its reliance on pork imports.

 

But China's food and catering sector, which imports much of its pork and beef from the US, will not be spared the effects of the tariff hikes, said industry insiders.

 

Since the start of April, the price of high-end steaks has increased by 30% to 50%, said Geng, the head of a restaurant in Wuhan city in Hubei province.

 

His company purchases beef from Inner Mongolia, but high-quality steaks still need to be imported from the US, Australia, and New Zealand, said Geng.

 

"If tariffs are added, the price will be even more expensive," he added.

 

- RFA