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’s a boon for farmers in Brazil and Argentina, and it’ll assist their business rather a lot,” mentioned Ishan Bhanu, lead agriculture analyst at commodities information supplier Kpler. “The ramifications of this might 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 12 months earlier, whereas Chinese language imports of its poultry elevated 19 per cent 12 months on 12 months in March, in line 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 international markets, having offered at a 25-cent low cost solely in January.
“China is transferring rapidly to safe provides of not solely soya, however different commodities,” mentioned Rodrigo Alvim, worldwide director of Brazil’s Minas Port Group. “This can end in much less demand for American grains.”
US agricultural shipments to China sank 54 per cent in January in contrast with a 12 months earlier. The Asian large sometimes buys 90 per cent of US sorghum exports and about half its soyabean exports.
US farmers had been “nonetheless reeling” from Trump’s first commerce conflict and “actually not thrilled about an prolonged” 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 cope with China.
“It’s pressing {that a} deal occurs. The farm financial system is way weaker now than it was in his first time period. After the primary commerce conflict, 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 12 months at $1.6bn, by not renewing registrations that permit tons of of US meat amenities to export there. There had additionally been solely restricted soy, wheat, corn or sorghum shipments this 12 months, mentioned 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 mentioned. “If the scenario continues, grain shipments might go to zero by Might,” they mentioned. “The one manner we might have a traditional 12 months is that if tariffs return to zero.”
Brazil was in a robust place to capitalise on the shift, mentioned Aurélio Pavinato, chief government of SLC Agrícola, one among Brazil’s largest grain producers. “With China seeking to diversify its suppliers and Europe more and more viewing Brazil as a secure choice, we’re seeing elevated overseas demand and a major uptick in costs,” he mentioned.
The South American nation has Trump to thank, not less than partially, for serving to it construct exporters able to entering into the US void. In the course of 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 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 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 usually holding up exports. However the newest commerce conflict might as soon as once more deliver a surge of capital, mentioned 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 change to sourcing protein for animal feed from Brazil as a substitute of the US, in line 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 rapidly be absorbed” if each China and the EU “focus all their sourcing on Brazil”.
Pedro Cordero of FEFAC mentioned Europeans shared that concern.
“We are going to compete with China, amongst different nations, for a similar merchandise,” he mentioned. “Meaning increased costs for the feed, which suggests increased costs for meals.” If South America can not step up, he added, “we might be in hassle”.
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