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HONG KONG, Oct 27 (Reuters Breakingviews) - Soybeans have become a trump card — not for Donald Trump, but for Xi Jinping. China’s leader is expected to resume purchases of the crop from the world's largest economy as part of a trade deal when he meets with his U.S. counterpart on Thursday in South Korea. Turning a crucial import into trade war leverage is a win for China’s planning model. U.S. Treasury Secretary Scott Bessent said on Sunday he anticipates that China will revive “substantial purchases” of U.S. soybeans for several years. China stopped buying the American produce after Brazil’s President Luiz Inácio Lula da Silva visited the People’s Republic in May. Trump had described the refusal to buy the legume from the U.S. as “an economically hostile act” and threatened to stop buying China’s cooking oil. Sign up here. It’s hardly a like-for-like retribution. The U.S. is China’s top market for used cooking oil — a popular input for renewable fuels — but at $1.1 billion last year, the export was worth only a fraction of the $12.6 billion China spent importing Uncle Sam's soybeans. While U.S. farmers are struggling to find a replacement market, the People's Republic has long set out to cultivate Brazil into a soybean superpower. Beijing has provided satellite surveillance to track deforestation, and Chinese fertiliser exports to the biggest Latin American economy grew to $18 billion in 2023, nearly triple 2018 levels. China’s agricultural conglomerate COFCO has invested more than $2.3 billion in Brazil since entering the market in 2014, including a port in Santos capable of handling up to 14 million tonnes of grain a year. Overreliance on Brazil can be risky too, but for the time being, China will be able to keep importing its soybean requirement, regardless of how long any new trade deal with the U.S. lasts. Context News For more insights like these, click here, opens new tab to try Breakingviews for free. Editing by Una Galani; Production by Aditya Srivastav Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors. Chan Ka Sing is China Columnist for Reuters Breakingviews. Prior to joining Reuters, he worked at Week in China, Hong Kong Economic Journal and Dow Jones Newswires.
