How the US-China war affects soybeans and corn

Como a guerra EUA-China afeta a soja e o milho
Image: Pixabay

The trade war between the United States and China has been putting strong pressure on the global agricultural commodities market, especially soy, corn and grains, according to Carlos Cogo, from Cogo Inteligência em Agronegócio. The rise of the dollar and the new tariffs proposed by the US make American grains more expensive abroad, harming their competitiveness.

In this scenario, the Donald Trump administration is threatening to impose additional tariffs on Chinese imports. This measure could directly affect US agricultural trade, which depends significantly on exports to China. Soybeans are one of the most impacted products, accounting for 52.5% of US agricultural sales to the Chinese market.

Cogo explains that if the proposed tariffs are raised to 60%, as suggested by Trump, the scenario could become even more tense. This increase in tariffs could result in retaliation from China. As a result, global trade could be reconfigured, directly impacting bilateral trade relations. US agricultural export losses between 2018 and 2019 exceeded US$ 27 billion, highlighting the economic impact of this trade war. In this context, Brazil, the US's biggest competitor in the grain market, should benefit, especially by expanding its share of the Asian market, with China becoming an even more strategic destination for Brazilian exports.

However, Brazil could face challenges in other sectors. Products such as coffee, orange juice and beef could lose ground in exports due to higher U.S. tariffs, which make American products more competitive. In addition, a possible re-election of Trump could impact soybean premiums in Brazil. During his previous term, premiums increased by an average of 148%, reflecting the volatility of the global commodity market.

Source: Leonardo Gottems | agrolink

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