The US and China’s dizzying tariff tit-for-tat has spurred Brazil’s agricultural sector and pummelled American farmers, as Beijing seems to Latin America’s largest economic system for a swath of products from soyabeans to beef.
Brazil was a serious winner in President Donald Trump’s first commerce battle with China, dramatically increasing its then-narrow lead over the US as Beijing’s largest meals provider. It now seems set to tug additional forward, with exports to China already surging earlier than Trump hiked his tariffs on the nation by 145 per cent and Beijing added levies of 125 per cent.
“It’s a boon for farmers in Brazil and Argentina, and it’ll assist their business so much,” stated Ishan Bhanu, lead agriculture analyst at commodities knowledge supplier Kpler. “The ramifications of this will probably be longer lasting than the precise measures — in Asia, nations will construct higher relationships with South America.”
Brazil’s beef gross sales to China climbed a 3rd within the first quarter of 2025, in contrast with a yr earlier, whereas Chinese language imports of its poultry elevated 19 per cent yr on yr in March, in response to native commerce associations. In the meantime, international demand has seen Brazilian soyabeans buying and selling at a $1.15 premium to their US counterparts on world markets, having offered at a 25-cent low cost solely in January.
“China is transferring shortly to safe provides of not solely soya, however different commodities,” stated Rodrigo Alvim, worldwide director of Brazil’s Minas Port Group. “This can lead to much less demand for American grains.”
US agricultural shipments to China sank 54 per cent in January in contrast with a yr earlier. The Asian big usually buys 90 per cent of US sorghum exports and about half its soyabean exports.
US farmers have been “nonetheless reeling” from Trump’s first commerce battle and “definitely not thrilled about an prolonged” second one, Kentucky soyabean farmer Caleb Ragland, a three-time Trump voter, said on Thursday.
In an open letter, Ragland, president of the American Soybean Affiliation, pleaded with Trump to make a cope with China.
“It’s pressing {that a} deal occurs. The farm economic system is far weaker now than it was in his first time period. After the primary commerce battle, we misplaced almost 10 per cent of market share to China that we by no means regained,” he wrote.
China additionally final month in impact blocked a major share of the entry of US beef exports to the nation, valued final yr at $1.6bn, by not renewing registrations that enable a whole lot of US meat amenities to export there. There had additionally been solely restricted soy, wheat, corn or sorghum shipments this yr, stated an individual aware of US agricultural exports, who requested anonymity as they weren’t authorised to talk to the media.
Many Chinese language grain crushers had halted imports from the US, as tariffs eviscerated their margins, the particular person aware of the business stated. “If the state of affairs continues, grain shipments may go to zero by Could,” they stated. “The one method we may have a standard yr is that if tariffs return to zero.”
Brazil was in a powerful place to capitalise on the shift, stated Aurélio Pavinato, chief government of SLC Agrícola, one in every of Brazil’s largest grain producers. “With China seeking to diversify its suppliers and Europe more and more viewing Brazil as a steady choice, we’re seeing elevated international demand and a major uptick in costs,” he stated.
The South American nation has Trump to thank, at the very least partly, for serving to it construct exporters able to getting into the US void. Through the first US commerce battle with China, Brazilian soyabeans traded at a couple of 20-per cent premium in comparison with US soyabeans, serving to funnel funding into the nation’s agricultural sector, stated Jim Sutter, chief government of the US Soybean Export Council.
That funding minimize into the US’s aggressive benefit, which was based mostly round sturdy infrastructure and reliability, Sutter stated.
The US share of China’s meals imports collapsed from 20.7 per cent in 2016 to 13.5 per cent in 2023, whereas Brazil’s grew from 17.2 per cent to 25.2 per cent in the identical interval.
Brazil’s logistics infrastructure nonetheless lags behind the US, with bottlenecks at ports typically holding up exports. However the newest commerce battle could as soon as once more carry a surge of capital, stated Eugenio Figueiredo, chief government of the Port of Açu, who hoped the instability would encourage China to put money into Brazilian logistics.
Europeans, who’re awaiting ratification of a bumper free commerce deal between the EU and Mercosur, may be pressured to modify to sourcing protein for animal feed from Brazil as a substitute of the US, in response to the European Feed Producers’ Federation (FEFAC).
With the EU set to slap 25 per cent retaliatory tariffs on US soyabeans, beef and poultry between April and December, considerations are mounting that the South American nation could not have sufficient produce to fulfill demand. Though Brazil has had a bumper crop, Sutter stated, its massive provide “will shortly be absorbed” if each China and the EU “focus all their sourcing on Brazil”.
Pedro Cordero of FEFAC stated Europeans shared that concern.
“We are going to compete with China, amongst different nations, for a similar merchandise,” he stated. “Meaning larger costs for the feed, which suggests larger costs for meals.” If South America can’t step up, he added, “we will probably be in hassle”.
Knowledge visualisations by Jonathan Vincent
