China May Buy Grains From Brazil, Australia, if Tariffs Drag on

The imposition of significant US tariffs is set to reshape global trade, with China – the world’s top agricultural importer – set to purchase more meat, dairy and grains from producers in South America, Europe and the Pacific, if a trade deal cannot be reached between leaders of the world’s two biggest economies.

Industry officials and analysts say the victims of these changes may be farmers in the United States, if they are unable to find other markets, while beneficiaries could be soybean suppliers in Brazil, wheat growers in Australia and pork suppliers in Europe, New Zealand or elsewhere.

China retaliated swiftly on Tuesday against fresh US duties, announcing hikes of 10% and 15% to import levies covering $21 billion worth of American agricultural goods.

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“There will be rerouting of trade after China’s import tariffs on US goods,” said Pan Chenjun, a senior analyst for animal protein at Rabobank in Hong Kong.

“The main products that will be impacted are pork offal and chicken feet. For pork, both muscle and offal, China will get more supplies from Brazil, Spain, the Netherlands and other EU countries.”

China cutting its dependence on US farm goods

China is the largest market for US farm exports, taking $29.25 billion worth of products in 2024, and any shift in trade flows could create opportunities for rival exporters.

That would continue a trend in which China has curbed dependence on US agriculture since the trade war during President Donald Trump’s first term.

On Tuesday, Trump also imposed duties on goods from Canada and Mexico, which could hurt the $191-billion US agricultural export industry. However, Commerce Secretary Howard Lutnick suggested on Wednesday there were could be easing of tariffs imposed on America’s neighbours depending on how talks progress in the days and weeks ahead.

China imported $16.26 billion worth of US beef, pork and chicken, including offal in 2024, but in its counteroffensive, it has unveiled tariffs of 15% on US chicken products and 10% on pork and beef.

European and South American meat shipments to China are expected to rise as a result, analysts said. While China initiated anti-dumping investigations into imports of European Union pork and dairy last year, sales have not been affected.

However, China’s reliance on the United States for chicken feet is likely to continue, as alternatives would be difficult to source fully and quickly, said Pan.

“Importers of chicken feet will just pay the duty and import from the United States in the meantime,” Pan said.

China is a key importer of US chicken feet, pork ears and offal – items valued in its cuisine, but in little demand in the United States.

More grain from Brazil, Australia

About half of US soybean exports go to China, even though the world’s No. 1 buyer has reduced its dependence on American oilseeds since Trump’s first term.

The latest tariff on US soybeans heralds even greater reliance on Brazil and Argentina.

“From a soybean perspective, South American suppliers are likely to benefit. Suppliers of other oilseeds, like canola could also see a boost,” Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney said.

China still depends on the United States for about two-thirds of its sorghum purchases, with Beijing’s 10% duty on the animal feed grain likely to favour Australian farmers.

“Sorghum would be a clear winner. Probably barley would also stand to benefit,” said Rod Baker, an analyst at Australian Crop Forecasters in Perth. “Australia is harvesting quite a big crop this year.”

Higher duty on US wheat is also expected to favour Australian suppliers, although China has reduced overall wheat imports in recent months amid ample local supplies.