US-China Trade War, Latin America Benefits

BEIJING, TUESDAY - Import tariffs on various United States commodities to China have officially come into effect. This trade war with the United States has led China to shift its import commodity sources, primarily to Brazil and Argentina. Australia may also benefit by increasing its agricultural exports to China.

American media, CBS, on Monday (10/3/2025) evening Washington DC time or Tuesday morning WIB reported that US farmers were hit by China's policy. CBS said that the policy was retaliation for US President Donald Trump's decision to impose import duties (BMI) on various Chinese commodities to the US.

China has imposed import tariffs on agricultural products from the United States. The commodities affected include beef, pork, chicken, and soybeans. All are subject to a 15 percent import duty.

Last week, the US officially imposed a 20 percent import duty on goods from China. The US has long set relatively high import tariffs on Chinese products. Due to Trump's new regulation, there will be imported products from China with import duties reaching up to 70 percent.

For China, this also becomes an issue because the majority of the meat consumed by its population is imported from the US. Not only meat, but they also import offal, feet, and animal parts that are generally not consumed in the US.

In total, the value of meat imports from the US by China amounts to 16.26 billion US dollars. In terms of soybeans, half of the US soybean production is sold to China.

For this reason, China has shifted its import sources to several countries. Brazil, Argentina, Australia, the European Union, and Pacific countries are expected to experience an increase in agricultural product exports thanks to the US-China trade war.

Brazilian soybean prices have risen as demand surges. Premium soybeans are snapped up by China

Brazil is the country that is expected to benefit the most. Brazil is the world's largest exporter of soybeans, beef, chicken and cotton.

In fact, during the trade war in Trump's first term, the United States lost its largest soybean market because China shifted to Brazil. To this day, the United States has not been able to recover from that loss.

It is estimated that Brazil will harvest up to 170 million tons of soybeans by 2025. Of this amount, 100 million tons will be exported. In 2024, Brazil experienced a trade balance surplus with China amounting to 30 billion US dollars.

"Brazilian soybean prices have risen due to soaring demand. Premium soybeans are being snapped up by China," said Agrinvest analyst Eduardo Vanin.

For Brazil, this is a positive trend. However, there is a price to pay as the supply of soybeans for the domestic market is reduced. As a result, animal feed prices will increase.

On the other hand, analysts predict that the drop in demand in the US will mean a drastic drop in prices. Soybean farmers in the US will suffer losses.

On the other hand, analysts predict that the drop in demand in the US will mean a drastic drop in prices. Soybean farmers in the US will suffer.

The tougher the US policy, the more other countries move closer to China.

Similar to the skyrocketing demand for meat imports by China. Meat prices in Brazil are rising and that means food prices are rising all over. As of January 2025, food prices have risen 9 percent. If not managed carefully, it is at risk for the government of President Luiz Inacio Lula da Silva whose popularity is declining.

"Despite domestic problems, in general, this wholesale demand from China is good for Brazil's competitiveness," said Ricardo Santin, president of ABPA, Brazil's meat producers' association.

Argentina, a country also located in South America, also reaped the benefits. In fact, the far-right President of Argentina, Javier Milei, has long been hostile to China. However, in the trade sector, both countries are enjoying a positive trend.

According to Reuters news agency, Latin American countries' trade balance with the US has stagnated over the past decade. In contrast, trade with China has continued to rise.

China has always stressed that it is a pragmatic partner and is only interested in doing business. This is what makes countries that are politically anti-China continue to trade with Beijing. China is slowly replacing the US as the number one trading partner in South America.

Argentina is expected to shift the majority of its beef and soy exports to China. In the mining sector, China will buy a third of Argentina's lithium production by 2024.

"The tougher the US policy, the more other countries will move closer to China," said Li Xing, a lecturer at the Guangdong Institute of National Strategy.

Meanwhile, Rod Baker, an expert from agricultural product firm Australian Crop Forecasters, said that for soybean exports, Brazil and Argentina do dominate.

"Australia is making a profit from exports of barley, sorghum and wheat," he said.

Trump's tariffs on Canada and Mexico are still on hold until April 2, 2025. Trump imposed them on March 4, 2025, but Canada immediately retaliated, prompting Trump to pause. Trump is still negotiating with President Claudia Sheinbaum on Mexico.

However, Canada did not back down. They imposed retaliatory tariffs on various US products. American-made alcoholic beverages were also withdrawn from the market. This hit the revenues of southern states, including Kentucky and Louisiana, which are Trump supporters.

Furthermore, the Province of Ontario in Canada has issued a decision to increase the tariff by 25 percent for electricity they export to the US. This electricity tariff increase is active as of Monday (10/3/2025) local time or Tuesday (11/3/2025) Indonesian time. The US states of Minnesota, Michigan, and New York enjoy electricity supplies from Ontario.

"I hate to do it because the U.S. is a close neighbor of Canada. But your government's decision has thrown everything into disarray," Ontario Premier Doug Ford told Fox News.

He said if the US continues to hit Canadian commodities with import tariffs, Ontario will shut off its power supply altogether.

Minnesota Gov. Tim Walz tweeted on social media. “Look at the consequences of this ridiculous tariff war. Minnesotans are paying for it, even though they are struggling to make ends meet.” Walz is the Democratic Party’s vice presidential nominee in the November 2024 election. (AP/Reuters)