China Retaliation on U.S. Farm Goods Hits Soybeans, Bolstering Brazil

By Ella Cao and Naveen Thukral

BEIJING/SINGAPORE, April 4 (Reuters) – China’s retaliation on Friday against new U.S. 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 U.S. President Donald Trump’s first term.

Beijing unveiled a slew of countermeasures, including additional duties of 34% on all U.S. goods, which are on top of the 10-15% tariffs placed on roughly $21 billion worth of agricultural trade in early March.

“This is going to cost the U.S. a lot of export business,” 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 soybean contract on the Chicago Board of Trade (CBOT) Sv1 settled down 34-1/2 cents to $9.77 a bushel, a 3.4% decline from Thursday and its lowest price on a continuous chart for 2025.

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

A European grains trader said the European Union, which has also vowed to retaliate, was also likely to put tariffs on U.S. soybeans.

“It’s all about soybeans. A major concern is if there is no agreement before the new crop for U.S. soy,” the trader said.

“As a big picture conclusion, all this trade war is bearish U.S. ags and bullish other origin ags,” the trader said.

The March levies have accelerated a pivot away from U.S. soybean 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 U.S. soybeans to China. But others could benefit too, including Argentina and Paraguay. On wheat, Australia and Argentina should benefit,” said Carlos Mera, head of Agricultural Market Research at Rabobank.

Sol Arcidiacono, head of Latam grains sales at HedgePoint Global Markets, said the basis for South American soybeans will get stronger for the full year, despite seasonality and record crops as the trade war escalates.

She added that current geopolitics will likely drive an increase in acreage for soybeans, mainly in Brazil, where expansion had been slowing lately.

On Thursday, a day after Trump’s tariffs announcement, Brazil port premiums reached a dollar per bushel over Chicago benchmark prices.

Trump unveiled a 10% baseline tariff on all imports from April 5 and higher duties on certain other countries including 34% on China, pushing the global trade war into overdrive.

China remains the largest market for U.S. agricultural products, but imports of U.S. farm goods dropped for the second consecutive year, falling to $29.25 billion in 2024 from $42.8 billion in 2022.

Also on Friday, China suspended import qualifications for sorghum from C&D (USA) Inc., which is Chinese-owned, citing phytosanitary problems. It suspended import qualifications 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.

(Reporting by Ella Cao and Lewis Jackson in Beijing, Naveen Thukral in Singapore, and Gus Trompiz and Sybille de La Hamaide in Paris; additional reporting by Ana Mano and Roberto Samora in Sao PauloWriting by Tony Munroe; editing by David Evans, Louise Heavens and Richard Chang)