Foreign media reported that U.S. soybean farmers are facing a crisis due to U.S. President Donald Trump's tariff policy. This is because demand from China, the largest purchaser, has decreased. China is paying attention to Brazil as an alternative supply source.
According to the New York Times (NYT) on the 20th (local time), soybeans (beans) make up the largest portion of U.S. exports to China. Last year, the U.S. exported over 27 million tons of soybeans to China, valued at approximately $12.8 billion (about 18 trillion won). This accounts for 9% of the total U.S. exports to China.
However, as mutual retaliatory tariffs continue between the U.S. and China, it is expected that U.S. farmers will face obstacles in exporting soybeans to China. In fact, a report by the Nihon Keizai Shimbun (Nikkei), citing data from the U.S. Department of Agriculture, noted that the Chinese government proactively halted reservations for U.S. soybeans and corn since mid-January, right before President Trump's inauguration.
This is a negative factor for both U.S. soybean farmers and China's poultry and livestock farmers. Farmers are concerned that U.S. agriculture may suffer irreparable damage. Currently, the U.S. has no effective measures apart from exploring export markets in third countries such as India, Egypt, and Mexico. NYT stated, "The American Soybean Export Council and the Soybean Association are seeking new markets in these countries, and new soybean processing plants have begun operations in the U.S.," adding that "they are also researching alternative uses such as biofuels beyond animal feed."
The only relief for U.S. farmers is government subsidies. Reports indicate that during the first round of the trade war with Trump, the government provided emergency aid to farmers amounting to $23 billion (about 33 trillion won). The Trump administration is also reportedly considering additional support this time.
Amid this, Brazil is targeting the gap. Brazil and Argentina account for 52% of global soybean production, with Brazil producing 40%. The U.S. accounts for only 28%. A representative from a soybean production company in Mato Grosso, Brazil's largest soybean growing region, told NYT, "If China cannot obtain U.S. soybeans, it will have to acquire more Brazilian soybeans," adding, "To do so, they will have to pay a higher price." In fact, the recent spot price of Brazilian soybeans is on the rise.
During the first round of Trump’s term, Brazil was one of the biggest beneficiaries of the U.S.-China trade war. Since 2017, China's imports of Brazilian soybeans have increased by 35%, while imports of U.S. soybeans decreased by 14% during the same period. Looking at China's imports of U.S. soybeans, in 2017, about 40% of total imports were from the U.S., but last year that figure dropped to 20%. In contrast, the proportion of Brazilian soybeans in China's imports increased from about 50% in 2017 to around 70% last year.
What is different this time is that China has been making large-scale infrastructure investments in Brazil over the past decade. China has laid the groundwork to increase soybean shipments to China through investments in logistics transportation infrastructure such as ports and railways in Brazil. This year, a terminal worth $500 million (about 710 billion won) led by the Chinese state-owned enterprise "COFCO" opened at Santos Port, the largest port in South America. This is expected to become the main logistics hub, according to NYT.