In response to the 20% tariff imposed by the United States, China intensified retaliation on Tuesday (4), suspending soybean import licenses from three American suppliers and interrupting the purchase of sawn wood from its main commercial partner. The dispute is the competition for supplying the largest food importing market in the world, where Brazil can expand its advantage.
Agribusiness experts provide immediate reaction from the global market. Future commodity contracts such as soy, corn and wheat should register new falls on the Chicago Stock Exchange, while Brazil consolidates itself as an alternative to meeting part of Chinese demand. With the loss of competitiveness of the US, prices paid to Brazilian exporters tend to rise, benefiting producers and traders.
In addition to the highest rates, the suspension of three American soybean exporters – CHS Inc., Louis Dreyfus Company Grains Merchandising LLC and EGT – should further restrict oil supply to China. According to the Chinese Customs Department, the loads had problems in the seeds, while the interruption of US wood imports was attributed to the presence of pests and worms.
Beijing measures are a direct retaliation for President Donald Trump’s decision to double the China import tariff from 10% to 20%. On the same day, the US also imposed a 25% tariff on imports from Canada and Mexico, alleging lack of cooperation from these countries to combat synthetic drug trafficking.
Brazil already has a wide advantage over the US in soybean exports to China
Brazil, the largest global soybean exporter, sold 69 million tons of grain to China in 2024, totaling R $ 175 billion. Commercial tensions between Beijing and Washington strengthen this relationship as Brazil offers more competitive prices.
On the other hand, US soybean exports to China totaled 22.13 million tons, a 5.7% drop over the previous year. Nevertheless, China reached a record of 105.03 million tons of soybean imported by 2024, volume 6.5% higher than the previous year.
About half of US soybean exports have China as a destination, moving $ 12.8 billion in 2024, according to US Census Bureau. The suspension of sawn wood also occurs in response to Trump’s decision on March 1 of investigating the importation of this product, signaling the possibility of 25%rates.
Meat exporters see opportunity, but avoid making projections
Chinese retaliation on American agricultural products such as soy, cotton, corn and meat can make room for Brazilian agribusiness. However, according to a report by the The State of S. Pauloproducers and exporters keep caution. The president of the Brazilian Association of Animal Protein (ABPA), Ricardo Santin, points out that it is still early to measure impacts, although Brazil is a more competitive alternative.
In 2023, China imported 562.2 thousand tons of chicken meat and 241 thousand tons of pork, 17.6% and 38% lower than the previous year. The Asian country remains the main destination of Brazilian chicken meat and the second largest for pork. At the moment, however, there are occasional restrictions on some Brazilian fridge units.