China retaliation on US farm goods hits soya beans, bolstering Brazil

BEIJING/SINGAPORE – China’s

retaliation on April 4

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

Beijing unveiled a slew of countermeasures, including additional duties of 34 per cent on all US goods, which are on top of the 10 per cent to 15 per cent tariffs placed on roughly US$21 billion (S$28.3 billion) worth of agricultural trade in early March.

“This is going to cost the US a lot of export business,” Mr Jack Scoville, vice-president of the Chicago-based Price Futures Group, said. “We’re pissing off everybody. That’s the problem. Where are we going to turn if we’ve slapped everybody with tariffs?”

The most active soya bean contract on the Chicago Board of Trade settled down by 34.5 US cents to US$9.77 a bushel, a 3.4 per cent decline from April 3 and its lowest price on a continuous chart for 2025.

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

A European grain trader said the European Union, which has also vowed to retaliate, was likely to put tariffs on US soya beans.

“It’s all about soya beans. A major concern is if there is no agreement before the new crop for US soya,” 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 soya bean 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 soya beans to China. But others could benefit too, including Argentina and Paraguay. On wheat, Australia and Argentina should benefit,” said Mr Carlos Mera, head of Agricultural Market Research at Rabobank.

Ms Sol Arcidiacono, head of Latin American grain sales at HedgePoint Global Markets, said local prices for soya beans in South America will strengthen over the full year, despite seasonality and record crops as the trade war escalates.

She added that current geopolitics will most likely drive farmers to produce more soya beans, mainly in Brazil, where expansion had been slowing lately.

On April 3, a day after Mr Trump’s tariffs announcement, Brazil port premiums reached a dollar per bushel over Chicago benchmark prices. Mr Trump unveiled a 10 per cent baseline tariff on all imports from April 5 and higher duties on certain other countries, including 34 per cent 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 on April 4, China cancelled some documentation needed to import sorghum from C&D (USA), which is Chinese-owned, citing food safety problems. It also cancelled import documents 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. REUTERS