The US and China’s dizzying tariff tit-for-tat has spurred Brazil’s agricultural sector and pummelled American farmers, as Beijing appears to be like to Latin America’s largest financial system for a swath of products from soyabeans to beef.
Brazil was a significant winner in President Donald Trump’s first commerce conflict with China, dramatically increasing its then-narrow lead over the US as Beijing’s largest meals provider. It now appears to be like 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 is a boon for farmers in Brazil and Argentina, and it will help their industry a lot,” mentioned Ishan Bhanu, lead agriculture analyst at commodities knowledge supplier Kpler. “The ramifications of this will be longer lasting than the actual measures — in Asia, countries will build better 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 keeping with native commerce associations. In the meantime, overseas demand has seen Brazilian soyabeans buying and selling at a $1.15 premium to their US counterparts on world markets, having bought at a 25-cent low cost solely in January.
“China is moving quickly to secure supplies of not only soya, but other commodities,” mentioned Rodrigo Alvim, worldwide director of Brazil’s Minas Port Group. “This will result in less demand for American grains.”
US agricultural shipments to China sank 54 per cent in January in contrast with a yr earlier. The Asian large sometimes buys 90 per cent of US sorghum exports and about half its soyabean exports.
US farmers have been “still reeling” from Trump’s first commerce conflict and “certainly not thrilled about an extended” second one, Kentucky soyabean farmer Caleb Ragland, a three-time Trump voter, mentioned on Thursday.
In an open letter, Ragland, president of the American Soybean Affiliation, pleaded with Trump to make a take care of China.
“It is urgent that a deal happens. The farm economy is much weaker now than it was in his first term. After the first trade war, we lost nearly 10 per cent of market share to China that we never regained,” he wrote.
China additionally final month in impact blocked a big 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 bunch of US meat services to export there. There had additionally been solely restricted soy, wheat, corn or sorghum shipments this yr, mentioned an individual acquainted with 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 acquainted with the business mentioned. “If the situation continues, grain shipments could go to zero by May,” they mentioned. “The only way we could have a normal year is if tariffs go back to zero.”
Brazil was in a powerful place to capitalise on the shift, mentioned Aurélio Pavinato, chief govt of SLC Agrícola, certainly one of Brazil’s largest grain producers. “With China looking to diversify its suppliers and Europe increasingly viewing Brazil as a stable option, we’re seeing increased foreign demand and a significant uptick in prices,” he mentioned.
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 conflict 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, mentioned Jim Sutter, chief govt of the US Soybean Export Council.
That funding lower into the US’s aggressive benefit, which was based mostly round robust infrastructure and reliability, Sutter mentioned.
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 conflict might as soon as once more convey a surge of capital, mentioned Eugenio Figueiredo, chief govt 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 change to sourcing protein for animal feed from Brazil as an alternative of the US, in keeping with 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 might not have sufficient produce to fulfill demand. Though Brazil has had a bumper crop, Sutter mentioned, its giant provide “will quickly be absorbed” if each China and the EU “focus all their sourcing on Brazil”.
Pedro Cordero of FEFAC mentioned Europeans shared that concern.
“We will compete with China, among other countries, for the same products,” he mentioned. “That means higher prices for the feed, which means higher prices for food.” If South America can’t step up, he added, “we will be in trouble”.
Information visualisations by Jonathan Vincent
