Trump trade war favors Brazil’s agribusiness, grain company SLC says

The trade war initiated by U.S. President Donald Trump, which led countries including China to retaliate against tariffs implemented by his administration, is favorable to Brazil, the CEO of agribusiness firm SLC Agricola said on March 13.

“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 U.S. soy “decreased a lot” since a previous 2018-2019 trade war, Pavinato said.

China last week retaliated swiftly to fresh U.S. 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 U.S. 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 U.S. soy.

Pavinato noted that China has also cut its reliance on U.S. 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 U.S. on agricultural goods, as in the previous trade war the two superpowers managed to reach an agreement.

The chart below reveals Brazil’s top ten most exported products in containers from Brazil to China in 2024, according to Datamar data.

Containerized Exports to China | Brazil | 2024 | TEUs

Source: DataLiner (click here to request a demo)

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 U.S.

“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.”

Reporting by Roberto Samora; Writing by Isabel Teles; Editing by Gabriel Araujo and Rod Nickel

Source: Reuters

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