The dual impact of tariffs and exchange rate fluctuations: the influence on China's soybean import prices amid the Sino-US trade war

This study examines the impact of the Sino-US tariff war and exchange rate fluctuations on Chinas soybean import prices during 2018-2019, addressing a critical research gap in understanding how these two factors jointly affect agricultural commodity markets. Using a static price decomposition method with high-frequency data from the US Department of Agriculture, IMF, and China Customs, the research isolates and quantifies the individual and interactive effects of tariffs and exchange rates on import costs. The results demonstrate that tariffs were the primary driver of cost increases in June-July 2018, with a 25% tariff hike raising import costs by 1,379 yuan/ton (100% contribution rate). Subsequently, from July to December 2018, exchange rate fluctuations became the dominant factor, with RMB depreciation contributing to a 527 yuan/ton increase (98.5% contribution rate). When both factors acted together from June to December 2018, they caused a total cost increase of 1,906 yuan/ton, with tariffs accounting for 72.4% and exchange rates for 27.6% of the increase. This study enriches theoretical understanding of agricultural price mechanisms and provides practical insights for policymakers and enterprises in managing trade-related price risks.