China’s recent retaliation against U.S. tariffs is accelerating its shift toward alternative suppliers for agricultural products, particularly soybeans. This transition began during the trade war from President Trump’s first term, and the latest countermeasures include imposing additional duties of 34% on U.S. goods, adding to the preexisting tariffs of 10-15% on approximately $21 billion worth of agricultural trade from early March. A Singapore-based trader noted, “It feels like shutting down all U.S. agricultural imports. The viability of any imports is in question with a 34% duty.”
They highlighted that this impact would be mostly felt by soybeans and sorghum since China had already reduced its imports of U.S. wheat and corn this year. Another trader in the European market observed that the European Union is also likely to impose tariffs on U.S. soybeans, further complicating the situation. This ongoing trade conflict is negatively affecting U.S. agricultural exports while benefiting other origins. Brazil is poised to be the primary beneficiary, given its substantial soybean harvest, which positions it to deliver a record import surge to China in the upcoming quarter.
According to Carlos Mera from Rabobank, “Brazil will be by far the main beneficiary, being the largest supplier that can replace U.S. soybeans. Argentina and Paraguay could also see gains, particularly in wheat, where Australia may benefit as well.” Despite being the biggest market for U.S. agricultural products, China’s imports from the U.S. have declined for two consecutive years, dropping to $29.25 billion in 2024 from $42.8 billion in 2022. Alongside these tariffs, China has suspended import qualifications for various U.S. agricultural products, citing phytosanitary issues as a concern.