A leaked photo of text messages from US Secretary of Agriculture Brooke Rollins to US Treasury Secretary Scott Bessent captures the absurdity and unintended consequences of the latest US international economic intervention.
Finally — just a heads up, I’m getting more intel, but this is highly unfortunate. We bailed out Argentina yesterday and in return, the Argentine’s [sic] are removing their export tariffs on grains, reducing their price, and sold a bunch of soybeans to China, at a time when we would normally be selling to China. Soy prices are dropping further because of it. This gives China more leverage on us.
What was intended as a tool of geopolitical strategy to tip the favor of Buenos Aires — a $20 billion currency swap line extended to Argentina — has had the effect of helping to funnel a bounty of Argentinian produced soybeans into the international commodities market and into the laps of Chinese buyers at a steep discount, leaving American soybean farmers high and dry.
The deal was pitched by the Trump administration as a tool to push against Beijing’s growing influence in Latin America. With Argentina’s ailing economy facing another debt crisis, the US stepped in to provide dollars in exchange for pesos to help the Milei government stay on track toward reforms and to offer an alternative to China’s often enticing deals in the lead-up to an upcoming mid-term election.
But, as is so often the case with government interventions in global markets, the repercussions have veered sharply off script. Chinese soybean imports from the US have plummeted to zero in recent weeks, according to trade data, while orders from Argentina have surged. Reuters reports that Beijing snapped up at least 10 cargoes from Argentine suppliers in a single week, a volume that rivals pre-trade-war levels. Freight rates for soy shipments from Argentina to China have spiked from the sudden flood of competitively priced soy.
The trade war between Washington and Beijing in 2018 and 2019 hit US soybeans with heavy tariffs and China pivoted to suppliers like Brazil and, increasingly, Argentina. Even after deals to smooth out the trade rivalry, Chinese purchases of American soy never fully recovered. US exporters — already hammered by years of retaliatory duties during the first Trump administration — sustained punishment yet again from this latest development.
China typically buys over half of all American soy exports for everything from livestock feed to cooking oil in the world’s most populous nation. That flow generated billions in revenue for Midwestern farmers and anchored rural economies from Iowa to Illinois. Soybeans made up about 20 percent of US cash crop receipts in 2024 worth $46.8 billion, according to data from the US Department of Agriculture. The $12.6 billion worth of soybeans sent to China made it the biggest American export to China.
The irony runs deeper when viewed through the lens of the Trump administration’s “America First” rhetoric. It helps to prop up a foreign country’s fiscal situation while dealing a punch to the gut of American farmers. The policy also intended to weaken China’s position, but has instead opened the door for China’s access to non-US soy at a discount. In an effort to rob Peter to pay Paul in the other direction in a domestic fiscal intervention, the Trump administration proposed using tariff revenues to subsidize America’s farmers. But it’s the trade itself that farmers correctly identify as the economic remedy. Todd Main — the director of market development at the Illinois Soybean Association — told Fortune, “We can grow anything. What we really want is good relations with our trading partners. We want markets. We don’t want bailouts.”
In the end, Secretary Bessent’s supportive measure for the South American ally has become an asset on the side of China’s international trade options and supply chains to the detriment of America’s agricultural industry, which itself is riddled with the problematic incentives of government policies. As the dust settles on this particular deal, policymakers should pause to consider the full spectrum of consequences of such financial bets. Not only should the US government keep its fingers out of the fiscal affairs of Argentina, and other countries for that matter, but it should also leave the American agricultural sector to the farmers themselves.
