Soybeans are straining Beijing’s message on tariffs. China looks set to buy more of the animal feed ingredient from the United States, even after duties were imposed. That’s despite official comments that imply the People’s Republic can quickly diversify away from the more than $12 billion of purchases it made from the United States last year. Markets sense it coming; soon others may see through the trade war bluster too.

Over the last month, Chinese social media became transfixed by Peak Pegasus, a ship laden with U.S. soybeans that raced to the port of Dalian, in a failed bid to get there before a 25 percent tariff kicked in on the U.S. legume. This week it was finally unloading its cargo, for state-owned buyer Sinograin.

All of this cuts against the official message of an easy pivot away from U.S. supplies. COFCO assured the public that China could increase Latin American imports and source alternative products to fill supply gaps. Sinograin said it could fully meet the needs of state soybean reserves without U.S. imports. Agricultural experts argued the tariffs would encourage other countries to produce more.

Markets are hard to fool, though. Some China soybean futures on the Dalian exchange notched up one of their largest daily gains in years last week, as investors bet prices would rise later in the year. More broadly, corporate executives seem well aware of the impact of trade war weaponry: Reuters reported last week that Sinopec’s lobbying led officials to dro proposed tariffs on crude oil. Beijing continues to project confidence, but every tariff setback makes the popular message tougher.

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