Donald Trump, with 277 delegates in the electoral college as of 9:00 am, announced his candidacy for president of the United States after his defeat to Joe Biden in 2020. The ticket, composed of Trump and JD Vance as vice president, promises a series of economic policies, including tax cuts, fighting inflation, reviving American manufacturing, and toughening policies against China and immigration. This agenda could directly impact global trade, especially in the agricultural sector, with potential effects on trade relations between the United States and China.
During his previous term, Trump initiated a trade war with China, imposing tariffs on Chinese products, including Huawei electronics. In retaliation, China imposed tariffs on US agricultural products, such as soybeans, corn and wheat. As a result, Brazil benefited, becoming the main supplier of agricultural products to China, with an increase in exports of soybeans, corn, chicken meat, pulp, sugar and coffee. However, the possible reintroduction of tariffs by the US puts this trade at risk. A recent report by the National Corn Growers Association (NCGA) and the American Soybean Association (ASA) warns of billions of dollars in losses for American farmers if tariffs are reimposed.
Impacts of Trump's Tariffs and Policies on the Agricultural Sector and Global Trade
Between 2018 and 2019, U.S. agricultural exports to China suffered losses of more than $1.4 billion, with $95 billion of those losses attributed to Chinese tariffs. If China reimposes tariffs on U.S. agricultural products, the losses could be even greater, directly impacting soybeans and corn. This situation could require Brazil to increase its exports to meet Chinese demand, increasing pressure on the Brazilian agricultural sector. Trump has stated that, under his administration, agribusiness will be treated like other sectors. He plans to avoid direct interventions in this segment. However, he intends to carry out a restructuring of the U.S. Department of Agriculture (USDA). This change could limit some of the agricultural policies currently in place.
Last Monday, TF Agroeconômica analyzed how a Trump victory could affect soybean prices. Technical resistance in the US$ 980 range for January 2025 has held, even with supply greater than demand. If Trump wins and restarts the trade war with China, soybean prices in Chicago could fall, while prices in Brazil would rise. In the opposite scenario, without new tariffs, global prices would tend to fall.
In addition, Trump has proposed a possible mass deportation of immigrants. This measure creates uncertainty, especially in states like California, which relies heavily on foreign labor to sustain its agricultural production. This proposal, although complex and costly to implement, could negatively impact agricultural production in the US.
Source: Leonardo Gottems | agrolink
