Trump trade war favours Brazil's agribusiness - source
Trade war strengthening premiums for Brazilian soybeans
14 March 2025
2 minute read
By: The trade war initiated by US President Donald Trump, which led countries including China to retaliate against tariffs implemented by his administration, is favourable to Brazil, Reuters reported, citing the CEO of agribusiness firm SLC Agricola on Thursday.
"The trade war continues to benefit Brazilian agriculture, and Brazil as a secure supplier for customers who demand food," Aurelio Pavinato said in a call with analysts following the company's fourth-quarter results.
SLC is one of Brazil's largest grain and cotton producers.
The upside to Latin America's No. 1 economy would be linked to strong demand from China, the world's top soybean importer, as the Asian country's reliance on US soy "decreased a lot" since a previous 2018-2019 trade war, Pavinato said.
China last week retaliated swiftly to fresh US duties announced by Trump, imposing hikes of 10% and 15% in levies covering $21 billion worth of American agricultural goods, including meat and soybeans.
Pavinato estimated China will import 80 million metric tons of soybeans from Brazil and 21 million tons from the US this year.
The trade war is already strengthening premiums for Brazilian soybeans over Chicago benchmark prices, he said, adding that they have the potential to rise 10% - precisely the tariff rate applied by China on US soy.
Pavinato noted that China has also cut its reliance on US corn and that Brazil would soon be able to meet all of China's cotton import demand.
The key question, he said, was whether there would be a new deal between China and the US on agricultural goods, as in the previous trade war the two superpowers managed to reach an agreement.
A deal like the one seen in the first Trump administration might not be beneficial for Brazil as it could lead China to import more from the US.
"But we don't believe it will happen," Pavinato said.
"There may be a deal, but agriculture would not be its pillar. The 2025 trade war seems much more geopolitical than commercial."
