China had been buying tons and tons of soy to the US for years. A country has won in place: Brazil

China likes American soybeans. A lot. Every year matters from the fields of Illinois, Minnesota or Iowa Millions of tons From a crop that is consumed directly in pod, it is processed or is intended to feed cattle. The problem is that in full Commercial Warand with him Tariff crossing Of more than 100% applied by Washington and Beijing to their respective exports, that American grain will probably stop being attractive in Chinese factories. It has already happened years ago, during the commercial war of the first mandate of Donald Trump. And then, as now, China began to look with increasing interest other sources of soybeans.

Which is it? Argentina and especially Brazil.

A figure: 27 million. He Tariff pulse Between the US and China, which has resulted in a rise in encumbrances of more than 100% to the commercial flow in both directions, threatens to hit a key merchandise: soybeans. The reason is very simple. American farmers sell a lot, a lot of soy to the Asian giant. In 2024 that flow exceeded 27 million tons metrics, with a value of 12.8 billion dollars. Moreover, oleaginous seeds (group that includes soy) were one of the main US exports to China in terms of value.

Two years ago, the US-China Business Council calculated that, together, oleaginous seeds and cereals represent the largest export of the US to China, with a value that was then ascended to 25.4 billion. To have a clearer image of what soybeans supposes in those accounts, The New York Times Precise that last year mobilized nine cents of each dollar of goods that the US sold in China. USDA data shows that the Asian country monopolizes Something more than 40% of the Total US Soy Sales.

A percentage: 135%. That is the rise of tariffs that will have to deal with that huge flow of American grain to China from now on. The percentage is the sum of two increases: the 10% imposed by Beijing in March to the importation of certain agricultural products and The extra 125% With which, already in recent weeks, he responded to the escalation of the commercial war with the US. The question they leave by driving those rise in levies is obvious: how will it affect the flow of American soybeans? Will it remain attractive to the Chinese market with that 135% rates?

The issue has generated expectation between The analysts And of course Farmers worry From the US, a good part of them installed in states that, such as Iowa, Indiana or Ohio, are important soy producers and last November they voted for Donald Trump. “We deal with bad weather, pests, tractor breakdowns,” he lamented recently Heather Feuerstein, owner of a Tnyt Michigan farm. To all these challenges are now added tariffs, which in their opinion suppose “a threat” for their way of life.

One date: 2017. While the tariff pulse with which he has started 2025 is being particularly intense, it is not the first time that Feuerstein and the rest of his colleagues are seen in a similar situation. Years ago, during his first presidential mandate, Trump has already started a commercial war with China that fully affected soy exports. As? Leading Beijing to bet on other suppliers and reducing the flow of grain ‘made in USA’. Nikkei precise which in 2017 was behind almost 40% of Chinese imports. Although the commercial flow remains high, in 2024 that figure was already 20%.

Recently the CNN elaborated A detailed graph in which it shows that between 2017 and 2018 the US soybeans exports to China foster from 31.7 million metric tons to 8.24. Since then the flow has been recovered until it is located at 27.2 last year, although the data remains below the one registered before Trump’s first mandate. In general, from the Department of Agriculture (USDA) esteem that the commercial war caused direct losses to the US agricultural exports that exceeded the 27,000 million of dollars between 2018 and 2019.

A country: Brazil. Every war has its winners. And the commercial open years between the US and China has a very clear one if we talk about soybean trade: Brazil. He same graph The CNN shows that as US exports lost bellows those of Brazilian grain shot. From 2016 to 2018 the flow destined for China rose to 68.6 million metric tons and in 2024 the 72.5 million tons were exceeded, well above the US export levels.

In general, it is estimated that in recent years China increased 35% Its annual imports of Brazilian soybeans while they reduced the Americans by 14%. If the growth is ever seen the growth was Very superior. What does that mean? That in 2017, Brazilian soybeans supposed about 50% of its imports for China, now Round and 70%.

A reflection “will have to acquire more”: “If you can’t get it from the United States, you will have to acquire more than Brazil. And they will have to pay more,” Comment to Tnyt Neusa Lopes, agricultural tour directive, an outstanding soy producer of the state of Mato Grosso, in Brazil. The truth is that the commercial war comes after, at the end of 2024, XI made a state visit to Brazil to strengthen ties between the two countries and the Brazilian Association of Soy Producers I confirmed recently that at the beginning of the month the Asian giant signed contracts for millions of tons of grain. Beyond Brazil, There are analysts They point out that Beijing could rely on Argentina, Another great producer.

Between what happened eight years ago and the current scenario there is however An important difference. After years of commercial flow between China and Brazil, today the first one has much easier to stock up on the crops of the South American country. The Asian giant has invested in warehouses, railways, ports and other infrastructure that facilitates the transfer of Brazilian soybeans in Chinese ships. The clearest example is the great open terminal this year in the port of Santos and in which It has been involved China Cofco.

A warning: prices. At the beginning of the year, with the still recent memory of what happened in 2017 and before the threats of Trump tariffs, Rabobank issued A report in which he already warned of the possible impact on the Chinese soy market. And although he recognized that its effect will probably be less than that of 2018-2019 for the role of Brazil, the increase in state reserves and “the growing adaptation of China to low protein food formulas”, the agency advanced that in all likelihood the commercial war would alter the price of soybeans.

As? Rabobank He spoke of a sensitive reduction of prices at the origin of the US and the cultivated area. In South America, however, the effect seems to be the opposite. Tnyt points out that his soy has become more valuable and specifically quotes a Brazilian farmer who is selling his bags of 60 kilos to 21 dollars, 10% more than a month ago. Brazilian soy prices even They are above of Chicago’s futures. However, the harvest season is already ending and much of the stock has been sold.

One question: And now? Waiting for the stage to be clarified and resolved by the open trade war in recent months between Washington and Beijing, Reuters reported A few days ago, American soy imports in China increased 12% in March. The reason: the agency talks about purchases made in forecast of the tariff pulse between the two countries. “March arrivals reflect preventive purchases in the fourth quarter of 2024, amid concerns about the renewed commercial tensions if Trump returned to office,” explains analyst Rosa Wang, from JCI, based in Shanghai.

Curiously, in March, Brazil’s imports descended, but that fall is partly related to crop delays. The forecasts They pass because the weight of the South American country increases in the coming months, as it did years ago. China also works to improve its own production, with more crops and greater performance. Your goal, according to The local press requiresis that the total production of grains in the country goes from 706.5 to 753 million tons in a matter of a decade, for which a considerable improvement (38%) of the performance of its fields expects.

Images | US Department of Agriculture (Flickr) 1, United Soybean Board (Flickr) and ABBY YAN (UNSPLASH)

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