President Trump recently lashed out against China, threatening to cut off cooking oil exports in response to the ‘economically hostile act’ of diversifying soy suppliers away from the U.S. The episode portends new flare-ups in US-China tensions, and can also be viewed as a microcosm of how the geopolitics of trade wars tend to evolve over time.

China: A Dominant Buyer in Global Soy

Soy is a staple food and critical input for animal feed in China but, most importantly, China’s annual domestic production of around 20 million metric tons (MMT) is eclipsed by its massive demand, which weighs in at around 124 MMT (2024-25 projection), or approximately 30% of the global soy market. This demand has also been growing at a healthy clip of around 4.6 MMT per year.

After China, the list of global soy purchasers falls off precipitously. In 2023, China accounted for nearly $60 billion in total purchases; the next highest buyer was Argentina at $5.6 billion, followed by Mexico at $2.3 billion.