China has quietly got Trump by the soybeans

After President Donald Trump rolled out the red carpet for his summit with China’s Xi Jinping last week, the U.S. and China agreed to move toward lower tariffs on $30 billion worth of goods in each direction. China’s side covers 1,619 U.S. products—stretching from beef and seafood to cosmetics and medical gear—but it leaves out a politically sensitive import: commodity soybeans.

While seed soybeans, soybean flour, and by-products from soybean processing made the cut for tariff relief, the raw soybeans American farmers sell in bulk to China—the ones at the heart of U.S-China farm tensions—did not. 

Soybeans are one of the country’s biggest agricultural exports, and China is the most important buyer. The U.S. exported $16.5 billion worth of soybeans last year, making soybeans the second-largest agricultural export after corn, according to the U.S. Department of Agriculture. China buys more soybeans than every other country because it has limited arable land. 

That dependence has made soybeans vulnerable to swings in U.S.-China trade policy. In the years before the first Trump trade war in 2018, the American Soybean Association estimated 28% of all U.S. soybean production........

© Fortune