Retaliatory Tariffs and the Reallocation of China’s Soybean Imports: Evidence from Source-Country and Product-Level Adjustments

Using global soybean trade data from 2011 to 2023, this study examines how China’s 2018 retaliatory tariff on U.S. soybeans altered the geographical and product composition of its agricultural imports. We employ difference-in-differences models to compare changes in directly exposed U.S. soybean imports with changes in imports from alternative source countries and substitute products. The results show that the tariff significantly reduced the relative import share of U.S. soybeans and redirected demand toward Brazil, Argentina, and several smaller suppliers. However, the expansion of alternative sourcing channels did not produce a sustained decline in aggregate import concentration, because Brazil absorbed a substantial share of the displaced demand. At the product level, the contemporaneous substitution effect is statistically insignificant, whereas the lagged effect is significant, indicating that product adjustment is constrained by technological, contractual, and infrastructural rigidities. The tariff therefore induced source-country reallocation relatively quickly, while relative-price-induced product substitution emerged only after an adjustment period. These findings clarify how trade-policy shocks reshape agricultural import relationships and provide implications for reducing supplier concentration, strengthening substitution capacity, and improving the resilience of China’s soybean import system.