Asian buyers are scaling back their purchases of U.S. agricultural products due to increasing uncertainty stemming from new trade tariffs and rising shipping costs. The U.S. government’s proposed fees on vessels linked to China, combined with hefty import duties on key trading partners, have created challenges for exporters and reduced the overall demand for American goods. China, the largest importer of U.S. agricultural products, has retaliated by imposing 34% tariffs on American exports.
Other Asian nations, such as Japan, South Korea, and Thailand, also import substantial quantities of U.S. wheat, corn, and soybean meal. The shipping crisis has compounded the issue, as President Trump’s initiative to revive U.S. shipbuilding has led to higher freight costs for exports, compelling exporters to seek non-Chinese vessels, which are in limited supply. The uncertainty around shipping costs has made the U.S. a less attractive option for buyers.
According to consultants, ship owners are hesitant to provide quotes for U.S. ports in the coming months, further complicating the situation. As a result, benchmark soybean and wheat futures are trading at multi-month lows, reflecting the diminished appetite for U.S. farm products. While Asia collectively imports approximately 35% of the world’s wheat and corn, and over 60% of global soybean trade involves China, the trade war’s effects are being felt across the region.
Even though countries like Japan and South Korea are likely to continue purchasing U.S. wheat due to its unique applications for human consumption, they may turn to other suppliers for feed grains like corn and soybeans. Overall, as purchasing of U.S. products stalls, traders are expressing concern that many Southeast Asian importers have yet to secure half of their requirements for the upcoming months. This leaves them exposed to potential supply shortages as they navigate through ongoing trade tensions.