China’s Snub of U.S. Soybeans Is a Crisis for American Farmers

On a windy September morning, Josh and Jordan Gackle huddled to discuss the looming crisis facing their North Dakota soybean farm.

For the first time in the history of their 76-year-old operation, their biggest customer — China — had stopped buying soybeans. Their 2,300-acre soybean farm is projected to lose $400,000 in 2025. Soybeans that would normally be harvested and exported to Asia are now set to pile up in large steel bins.

Since President Trump imposed tariffs on Chinese goods in February, Beijing has retaliated by halting all purchases of American soybeans.

That decision has had devastating repercussions for farmers in North Dakota, which exported more than 70 percent of its soybeans to China before Trump unveiled the new tariffs this year. Unless China agrees to restart its purchases as part of a trade deal, farmers that depend on the Chinese market will be facing steep losses that could fuel farm bankruptcies and farm foreclosures around the United States.

China’s reluctance to purchase American soybeans and other agricultural products is expected to be a central topic as top officials from the United States and China meet for another round of economic negotiations in Spain this week.

Those talks are being anchored by Treasury Secretary Scott Bessent, whom Mr. Trump has put in charge of negotiating and securing a favorable trade deal with China. A win would undoubtedly curry favor with Mr. Trump. But in a strange twist, it could also help Mr. Bessent financially.

The Treasury Secretary owns thousands of acres of North Dakota farmland, worth up to $25 million. The properties grow soybeans and corn in a state that exports most of its agricultural products to China. The investments have earned Mr. Bessent as much as $1 million in rental income annually, according to his financial disclosure filings.

But the fortunes of Mr. Bessent, a multimillionaire former hedge fund manager, are not nearly as exposed to China’s whims as are those of the family farmers struggling to figure out how to sell their soybeans and keep their finances from falling apart.

To farmers in North Dakota, the forces of high interest rates, high input costs and falling prices are reminiscent of the 1980s farm crisis, which hobbled U.S. agriculture for nearly a decade and hollowed out much of rural America.

“The stress level is much higher now than it was then,” Jordan Gackle, 44, said in an interview. “If we keep this going for very long, then we are going to see the kind of foreclosures that were happening.”

Standing before a field of soybeans a few weeks away from harvest, he added: “All of it is unnecessary. The U.S. was not forced into this by anybody.”

An American soybean slump

In a typical year, more than half the soybeans grown in the United States are sold to China. That includes around 70 percent of North Dakota’s soybeans, which are routed by train to ports in the Pacific Northwest and then shipped to Asia.

But Mr. Trump’s trade war with China has changed that dynamic. After the president imposed tariffs on the goods of that country on the grounds that its economic practices threaten U.S. national security, Beijing retaliated with tariffs of its own. The total duties that China imposed on American soybeans are now up to 34 percent, according to the American Soybean Association, making them more expensive than what China can buy from Brazil. U.S. farmers also believe that China is snubbing American beans to put pressure on the Trump administration.

In North Dakota, a rural state with an economy that revolves around energy and agriculture, the hit to the farming sector threatens to sink land values and sap investment from small towns. Compounding those problems is the fact that prices remain high.

“The input costs for fertilizer, chemicals, cost of land, cost of equipment, all of those things are increasing,” said Josh Gackle, 50, chairman of the American Soybean Association. “And the price of the commodity is decreasing.”

Promises broken

In Mr. Trump’s first term, Beijing drastically scaled back purchases of American agricultural products to gain leverage in trade negotiations after the president slapped tariffs on Chinese goods. The decision was politically calculated: Farmers tend to live in Republican states that voted for Mr. Trump, so harming them economically threatened a core constituency.

The United States and China ultimately reached a trade deal toward the end of Mr. Trump’s first term, which included a commitment from Beijing to purchase large amounts of American farm products. But it failed to live up to those commitments after the pandemic frayed its relations with the United States.

When Mr. Trump started his second term, his top economic officials promised to protect America’s farming industry as they embarked on tariff fights with China and other nations.

In August, Mr. Trump called publicly for China to step up its purchases of American soybeans in a direct plea to China’s top leader, Xi Jinping.

“Our great farmers produce the most robust soybeans,” Mr. Trump wrote on Truth Social, urging China to quadruple its orders.

The attention from the White House raised hopes among North Dakota farmers that a deal might be near. But no progress has been made. With soybean harvest season just weeks away, they warn that the situation is getting dire.

“I feel like we’re out of time,” said Justin Sherlock, 37, a farmer from Dazey, N.D.

Mr. Sherlock, who is also president of the North Dakota Soybean Growers Association, said that local banks were already starting to tighten their lending terms on farmers. That will make it hard for farms to purchase new equipment next year, further reducing their profitability and increasing the chances of closure.

“If we don’t get a deal in the next few weeks, I think this turns what is hopefully a one-year problem into a multiyear problem,” Mr. Sherlock said.

Mr. Sherlock said the standoff was particularly upsetting given that the United States spent 40 years building its soybean industry around China as its largest customer. “Are we going to lose a generation of farmers because of the trade war? I think that’s what we’re fast approaching.”

White House officials have been considering rolling out federal aid to keep farmers afloat like they did during the 2019 trade war.

Top U.S. and Chinese negotiators have been meeting regularly this year after Mr. Trump increased tariffs on Chinese imports to 145 percent. An agreement in May reduced those to 30 percent, but the two sides remain far apart on other areas such as intellectual property theft, export controls on sensitive American products such as microchips and access to the Chinese market.

“What you’re seeing with China is them obviously trying to flex their muscles in a way which will back us down,” said Peter Navarro, the White House trade adviser. “We understand what they’re doing. Negotiations with them are ongoing.”

Struggling to sell the farm

The role Mr. Bessent is playing poses a potential conflict of interest given that he owns thousands of acres of farmland in North Dakota.

At his confirmation hearing in January, Mr. Bessent said that he would personally push his Chinese counterparts to purchase the farm products that they had promised to buy in the trade deal Mr. Trump signed with China in 2020.

The Treasury secretary, who noted that he listened to farm radio on weekends, promised lawmakers that he would back farmers if America’s trading partners retaliated against them.

“Our family is involved in the farming business, in soybeans and corn, so I’m very sensitive to this and very up-to-date,” Mr. Bessent said. “The American farmers have been very loyal, 90 percent of rural voters voted for President Trump. So they should know that their interests are his interests.”

Mr. Bessent was supposed to sell his farmland this year as part of a government ethics agreement that requires top officials to divest from assets if their federal work could directly influence the assets’ value.

The Office of Government Ethics said last month that Mr. Bessent failed to fully comply with an agreement that required him to divest his financial assets. In a letter to the Senate Finance Committee, Dale Christopher, the ethics office’s deputy director of compliance, added that it was Mr. Bessent’s “personal responsibility to avoid taking any action that could create a real or apparent conflict of interest with regard to his holdings.”

After receiving the warning, Mr. Bessent pledged to fully comply with his ethics agreement by Dec. 15.

Land brokers and auctioneers in North Dakota said they were unaware that Mr. Bessent was trying to sell his property, although it is possible that he is trying to do so privately.

The feasibility of selling that much land in a short time can depend on various factors, including the type of rental contracts Mr. Bessent has on his farms, who operates the land, the labor market and whether family farmers can afford to buy.

China’s shunning of American soybeans is most likely making it harder for Mr. Bessent to unload his farms. Although farmland prices in North Dakota have been rising by more than 10 percent annually this decade, high interest rates and falling soybean and corn prices mean that land values are expected to flatten or fall.

“If I were a seller, I would want to get it on the market sooner rather than later,” said Steve Johnson, owner of Johnson Auction and Realty in Fargo. “The Chinese aren’t buying the soybeans.”

The loss of business from China is creating disruptions across the soybean supply chain, which includes grain elevators, crushers and trains that transport them across the country.

Unless a deal is reached, American soybean farmers will be forced to store the soybeans that they harvest to avoid having to sell them at a huge loss. They are already scrambling to find extra storage such as white plastic bags or spare bins where the soybeans can be preserved until the market corrects itself.

At Arthur Companies, which operates large grain elevators in North Dakota, Kevin Karel is working quickly to build more temporary storage to hold up to seven million bushels of soybeans that will sit on asphalt pads and be protected by tarps.

He also expects to accelerate exporting corn to other countries to make more storage space for soybeans. If no deal is reached with China, U.S. soybean exporters will have to lower prices and hope that other countries will be enticed to buy them.

“There’s no replacement in the market for China,” Mr. Karel said.

China has not closed the door to buying American soybeans. In recent weeks, Chinese officials have visited Washington and North Dakota to discuss the possibility of future purchases.

Bill Wilson, a professor of agribusiness and applied economics at North Dakota State University, said that China would prefer that agricultural trade with the United States be as unrestricted as possible so that it can have access to American soybeans in the event of a dockworker strike or other disruption that interferes with its supplies in Brazil.

But China appears unlikely let go of its leverage over American farmers, and it may not be easy for them to recover.

“I have never seen as monumental a disruption in agriculture as we’re experiencing now,” said Mr. Wilson, who has been teaching at the university for 43 years. “These are turbulent, turbulent times.”