China retaliation on US farm goods hits soybeans, bolstering Brazil

FMT:

 

China retaliation on US

farm goods hits soybeans,

bolstering Brazil

Reuters

-04 Apr 2025, 09:18 PM

Brazil will be by far the main beneficiary, the biggest supplier that can replace US soybeans to China, says Rabobank.

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A European grains trader said that the EU, which has also vowed to retaliate, was also likely to put tariffs on US soybeans. (EPA Images pic)

BEIJING: 

China’s retaliation today against new US tariffs is poised to accelerate Beijing’s move towards alternative suppliers for agriculture goods including Brazil, a shift that began during the trade war of President Donald Trump’s first term.

Beijing unveiled a slew of countermeasures, including additional duties of 34% on all US goods, which are on top of the 10%-15% tariffs placed on roughly US$21 billion worth of agricultural trade in early March.

“It is like shutting down all US agricultural imports. We are not sure if any imports will be viable with 34% duty,” said a Singapore-based trader at an international trading company which sells grains and oilseeds to China.

“The main impact will be on products like soybeans and sorghum. It is not going to be so much on wheat and corn as China has not been buying much of wheat and corn from the US this year anyway,” the trader added.

A European grains trader said that the EU, which has also vowed to retaliate, was also likely to put tariffs on US soybeans.

“It’s all about soybeans. A major concern is if there is no agreement before the new crop for US soy,” the trader said.

“As a big picture conclusion, all this trade war is bearish US ags and bullish other origin ags,” the trader said.

The March levies have accelerated a pivot away from US soybean imports and shifted demand to Brazil, where a bumper harvest puts it on track to deliver a record-breaking second-quarter import surge for China.

“Brazil will be by far the main beneficiary, the biggest supplier that can replace US soybeans to China.

However, others could benefit too, including Argentina and Paraguay. On wheat Australia and Argentina should benefit,” said Carlos Mera, head of agricultural market research at Rabobank.

Trump on Wednesday unveiled a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries including 34% on China, pushing the global trade war into overdrive.

China remains the largest market for US agricultural products, but imports of US farm goods dropped for the second consecutive year, falling to US$29.25 billion in 2024 from US$42.8 billion in 2022.

Also today, China suspended import qualifications for sorghum from C&D (USA) Inc., which is Chinese-owned, citing phytosanitary problems.

It suspended import qualifications of poultry meat and bone meal from American Proteins, Mountaire Farms of Delaware and Darling Ingredients.

Additionally, it suspended imports of poultry products from Mountaire Farms of Delaware and Coastal Processing.