Disrupting Path Dependence: Tariff-Induced Import Substitution in China’s Soybean Market

Soybeans are of strategic importance to China, yet the country’s heavy reliance on imports leaves it highly exposed to policy and market disruptions. Existing studies have largely focused on the initial 2018 tariff episode, while the evolving impacts of subsequent and intensified tariff measures remain insufficiently explored. This study investigates how tariff shocks transmit through import reduction, structural reallocation, and price pass-through by employing a multi-phase difference-in-differences (DID) framework in combination with a continuous-intensity DID model. Using monthly data from January 2015 to June 2025, the analysis evaluates the effects of tariff escalation on import volumes, source-country shares, and landed import prices, thereby capturing both stage-specific dynamics and intensity-dependent responses. Robustness is verified through event-study parallel trend tests and placebo validations. The results show that (1) import volumes from the United States declined sharply and did not fully revert, indicating that tariffs disrupted long-standing trade path dependence; (2) source-country shares reallocated away from the U.S. toward South American suppliers, reinforcing diversification in China’s supply structure; and (3) tariff costs were asymmetrically passed through to prices, with U.S. soybean prices rising by approximately 43 percent, while non-U.S. prices remained relatively stable. Overall, the findings demonstrate that tariff shocks functioned as structural catalysts rather than temporary disturbances, accelerating China’s transition toward a more diversified and resilient soybean import architecture under heightened geopolitical uncertainty.