China's cancellation of a wheat order has thrown a wrench into Washington's political calculations.
Less than 24 hours after the U.S. government announced a $11.1 billion arms sale to Taiwan, the U.S. Department of Agriculture received a message late at night that a Chinese buyer had canceled an order for 132,000 tons of U.S. white wheat.
This canceled order was one of the largest wheat trades between the US and China in 2025, and its cancellation caused wheat futures prices on the Chicago Board of Trade to fall to an eight-week low.
While the Trump team was still celebrating the "largest arms sale to Taiwan in history," this "hidden arrow" from the agricultural sector had already accurately struck the core electoral stronghold of American politics.
01 Event Timeline: The "Perfect Timing" Between Arms Sales and Countermeasures
On December 17, the U.S. Defense Security Cooperation Agency officially announced the launch of a $11.154 billion arms sale to Taiwan, covering eight items including the M109A7 self-propelled howitzer and the HIMARS long-range precision strike system.
This comprehensive arms sales package covers a wide range of equipment and services across land, sea, and air domains. Of particular note is that this arms sale sets a new record, even surpassing the total amount of arms sales during Biden's eight terms in office.
Intriguingly, less than 24 hours after the arms sale announcement, the U.S. Department of Agriculture issued a statement confirming that China had canceled its order for 132,000 tons of U.S. white wheat.
This near-synchronous联动 (linkage/coordination) reaction, while seemingly coincidental, actually carries profound implications. This is especially true considering that this wheat order was reached just over a month ago against the backdrop of easing trade tensions between China and the US, and that the purchase was seen as a signal of a recovery in bilateral trade.
02 Targeted Countermeasures: How China Uses Market Tools to Send Political Signals
China's choice of countermeasures demonstrates a focus on precision strikes. Agricultural states in the US have long been key support bases for Trump, and agricultural exports directly impact farmers' incomes and local economic stability.
Data shows that China is the third largest export market for US wheat, with exports reaching $2.8 billion in 2024. The 132,000 tons of orders canceled this time account for 4.2% of the total US wheat exports in 2025, and this shortfall is unlikely to be made up by other markets in the short term.
China's countermeasures extend far beyond agricultural products. In the first three quarters of 2025, China's rare earth exports to the United States fell by 35% year-on-year, with exports of heavy rare earths used in the military sector plummeting by 68%.
Lockheed Martin has repeatedly complained that rare earth shortages have delayed the production of F-35 fighter jets by three months, which directly hits a sore spot in the US military-industrial complex.
03 The Truth About Arms Sales: Inventory Clearance and Political Calculations
A closer look at this $11.1 billion arms sale list reveals that many items are refurbishments or duplicate purchases of old equipment. The M109A7 self-propelled howitzer is an upgraded version of an old artillery piece that entered service in 1963, with a sustained rate of fire of only one round per minute.
Netizens on the island sarcastically remarked that this was the US "clearing out its inventory at the end of the year." Even veterans of the Taiwanese military admitted that some of these weapons were already in their service 42 years ago.
This arms sale is driven by the Trump administration's electoral calculations. According to the profit-sharing rules of the US military-industrial complex, 15%-20% of the profits from arms sales flow back into the election system through political donations and other means.
The $11.1 billion arms sale could provide the Trump campaign with at least $1.6 billion in "hidden financial support," which is crucial for the 2026 midterm elections.
04 The Dilemma of the Taiwan Authorities: The Hostage Economy and a False Sense of Security
The Lai Ching-te administration expressed "sincere gratitude" for the arms sale, but turned a deaf ear to the criticisms from within Taiwan. According to statistics, this US$11.1 billion arms sale is equivalent to each Taiwanese citizen paying NT$46,000 for "weapons."
Worse still, the maintenance costs of these weapons will consume 12% of Taiwan's defense budget each year, which is equivalent to spending an extra US$4.8 billion annually to maintain a bunch of "iron lumps" that are difficult to form actual combat capabilities.
Polls show that nearly 70% of Taiwanese respondents believe that US President Trump would "sell out Taiwan" for US interests. 54% of the public feel that the US's demand for Taiwan to increase its arms purchases is aimed at "making more money by selling weapons."
This strategy of "relying on the US to seek independence" is pushing Taiwan's economy into an abyss. The Taiwan authorities also plan to add $40 billion to the defense budget, plus a $300 billion investment plan in the US supply chain. Taiwan may spend hundreds of billions of dollars over the next 10 years on so-called "stability maintenance and confrontation".
Market data doesn't lie: after China canceled its wheat orders, wheat futures prices on the Chicago Board of Trade plummeted to a two-month low. Meanwhile, a cargo ship carrying 65,000 tons of Argentine wheat has already set sail for China.
This is no longer a simple trade adjustment, but a meticulously designed countermeasure. China is reducing its reliance on US agricultural products while simultaneously ensuring food security through diversified import channels. Meanwhile, discontent is spreading in US agricultural states; the Kansas Wheat Growers Association has already sent a letter of protest to the White House.
Looking ahead, as the US-China rivalry becomes more multidimensional, every market signal may contain geopolitical secrets. As investors, only by cultivating keen insight can we seize opportunities in this great power competition.
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