Argentina Temporarily Eliminated Export Taxes and Sold Billions in Soybeans to China During US Harvest Season
A Harvest Season Betrayal: How Argentina’s Tax Gamble Left U.S. Farmers in the Dust
A three-day tax holiday in Argentina gave China the soybeans it wanted—and left American farmers staring at full bins and empty pockets.
It started with a leaked phone message. In late September, an AP photographer caught a shot of Treasury Secretary Scott Bessent’s phone. On the screen sat a blunt text—reportedly from Agriculture Secretary Brooke Rollins—accusing Argentina of using U.S.-backed financial support to ditch its soybean export tax just long enough to steal China’s business. The note wasn’t confirmed, but the fallout told its own story.
Argentina moved fast. For three short days, President Javier Milei’s government suspended grain export duties. The move opened the floodgates. Chinese buyers rushed in, scooping up as much as a million tonnes of soybeans—about a dozen ships’ worth—before the taxes snapped back into place once sales hit a $7 billion cap. The window was tiny, yet perfectly timed. It landed right in the heart of the U.S. harvest, a moment when farmers usually ink big contracts with China.
This year, those contracts never came. And analysts say they may not come back.
Brazil at 90 Percent, America Below 4
Look at China’s customs records from July 2025 and the shift jumps off the page. Nearly 90 percent of China’s soybean imports came from Brazil. The U.S.? Barely 4 percent. Through August, Brazil controlled almost three-quarters of the 73 million tonnes China bought, while the U.S. share slipped below a quarter—and continues to shrink.
The math explains why. After the Trump administration slapped a 104 percent tariff on Chinese goods last spring, Beijing fired back. Duties on American soybeans soared to almost 97 percent. On paper, the combined tariff looks crushing at 105 percent. In practice, after tweaks and workarounds, Chinese buyers still face about a 23 percent penalty when they price U.S. beans against Brazil’s.
That gap is brutal. Landed U.S. soybeans cost roughly $776 a tonne. Brazilian beans? About $380. No wonder one trader quipped, “Chinese crushers don’t even bother sending us emails anymore.”
The Three-Day Fire Sale
Argentina’s gamble showed how fast a single policy shift can flip the market. Milei’s decree gave exporters until October 31—or until $7 billion in sales—to ship soy without duties. Beijing wasted no time. In just days, the threshold was hit, and ships lined up in Argentine ports while U.S. beans sat unsold.
For Buenos Aires, it was a tactical masterstroke. For the U.S., it was a gut punch. The sales didn’t just compete with American farmers; they replaced them at the very moment demand usually spills across the Pacific into the Midwest.
Full Bins, Empty Accounts
Talk to farmers in the Mississippi Delta and the picture gets personal. Grain bins so packed the vents can’t breathe. Soybeans sitting at $10 a bushel—$2 below breakeven for many operations. And worst of all, silence from Chinese buyers.
The damage doesn’t stop at the farm gate. Equipment dealers see their showrooms gathering dust. Rural banks tighten loans. Lawyers report more bankruptcies under Chapter 12. It’s a chain reaction that hits every small town built on agriculture.
Trade numbers back up the pain. By July, Chinese soybean purchases from the U.S. were down more than 50 percent from a year earlier. For the full season, U.S. exports to China dropped by over a third. That’s not just lost sales. It’s working capital gone, the very money farmers count on to finance next year’s planting.
Brazil’s Long Game Pays Off
Argentina stole the spotlight with its tax holiday, but the deeper story is Brazil. For years, Brazilian growers have boosted yields, not just acreage. With Chinese money, they’ve built railroads and ports in the Northern Arc, cutting costs and speeding exports.
Now the relationship has matured. Chinese investors aren’t just buying beans; they’re building crush plants, logistics hubs, and meal-processing facilities. That integration makes it harder for China to walk away. Brazil has become the default supplier, while the U.S.—once the safe bet—gets considered only if the price gap closes.
China’s Balancing Act
Still, leaning too heavily on South America carries risks. China has always liked to spread its buying power, keeping suppliers guessing and prices in check. Dependence on Brazil, Argentina, and Uruguay could backfire if they start coordinating on price—or if weather knocks out a harvest.
Some analysts believe China will mix in Russian and Ukrainian corn to ease feed demand, while pushing back against South American price hikes. Brazil, meanwhile, may see this as a chance to lead a regional bloc that dictates terms.
Where the Money Flows
For investors, the shift is already reshaping the map. Crushing plants in the U.S. Midwest may stay busy if more beans stay home, though they’ll face competition from cheap Argentine meal. Brazilian logistics firms—from ports to rail lines—look set for another boom.
Storage operators in the U.S. may profit from wide “carry” spreads, where beans get stored for sale later, though any trade deal could collapse those margins overnight. And of course, if Washington and Beijing find a way to temporarily ease tariffs, markets could swing hard in a matter of days.
One thing is clear: old patterns can’t be trusted. Politics, climate, and trade wars now matter as much as weather reports when it comes to soybean prices.
What’s Next for U.S. Farmers?
Without tariff relief or a serious trade breakthrough, South America will likely remain China’s top source of soybeans through 2026. Argentina’s three-day gamble proved just how quickly the U.S. can lose out when another country spots an opening.
The leaked text message may fade, but the warning stands. Washington’s financial strategies and farmers’ realities are pulling in opposite directions. Until they line up, American bins will stay too full, and balance sheets too thin. For farmers across the Midwest, the message is hard to miss: the world’s biggest customer has moved on—and it may not be coming back anytime soon.
NOT INVESTMENT ADVICE