Opinion | Why China can’t count on Brazil to fill the soybean gap in its trade battle with the US
Gustavo Oliveira writes that timing, huge demand and structural bottlenecks diminish Brazil’s reliability as a backup soybean supplier to China
The escalating threats between the United States and China are raising tensions to another level. US President Donald Trump’s proposed 10 per cent tariffs on an additional US$200 billion of imports from China set the bar above Beijing’s ability to retaliate with tit-for-tat tariffs, since China’s total imports from the US amount to only US$154 billion.
So China is likely to impose restrictions on US investments and boycott US products.
Boycotting US soybeans by turning to Brazil’s bumper harvest seems like an ace in the hole for Beijing, since soybeans alone account for 10 per cent of total US exports to China. Moreover, destabilising US agricultural exports could turn the traditionally conservative and soy-dependent American Midwest against the Republican Party in November’s midterm elections.
After all, China’s gargantuan market accounts for 65 per cent of global soybean imports; thus, without being able to offload its harvest to China, the economy of the US Midwest would essentially risk collapse.
But can China count on Brazil to substitute US soybeans? The answer is no.
