An Unexpected Friend: How Trump Helped Brazil Overtake the US and Dominate the Chinese Market

Brazil is by far the largest exporter of soybeans to China, the world's leading consumer of the oilseed, followed by the United States. Interestingly, Brazil's leadership was consolidated thanks to Donald Trump's trade policies during his first presidential term, between 2017 and 2021, and gained renewed vigor in his second term with the resumption of the US-China trade war. The consequence has been growing dissatisfaction with the Republican among American soybean farmers.

The importance of the Chinese market in the sector is evident in the numbers: in 2024, the country led by Xi Jinping accounted for 61.1% of all global imports of the oilseed. This volume is explained by the country's heavy use of the input for animal feed production, destined for the country's pig and poultry farming, whose demand is met by only 15% with domestic production, relying on imported grains for 85%.

Last year, according to the General Administration of Customs of China, the country spent US$52.8 billion on importing 105 million tons of the commodity , of which 71.1% came from Brazil and 22% from the United States.

The third and fourth largest exporters were Argentina and Uruguay, with significantly lower volumes of 4.1 million (3.9%) and 2.02 million (1.9%) tons, respectively.

Until 2012, the US had always met the majority of the Asian giant's demand. Brazil surpassed American exports the following year, but sales from the two Western countries remained close until 2016, when Brazil's shipments to China accounted for 45.7% of Chinese purchases, while the US accounted for 40.4%.

In 2017, Trump took office advocating tariffs on foreign goods as a form of retaliation against countries for unfair practices toward the US. That year, Brazil's share of China's soybean imports rose to 53.3%, while the US share fell to 34.4%.

The major turning point came in 2018, when the first round of tariffs on Chinese goods was effectively implemented. Beijing retaliated by imposing tariffs on American products, and one of the main targets was agricultural commodities, particularly soybeans, the main American agricultural export to China.

With new tariffs on US soybeans, Chinese importers began seeking alternative suppliers. Brazil then began selling record volumes to the Asian dictatorship. That year, Brazil's share of the Chinese soybean market reached 75.1%, leaving the US with 18.9%.

In January 2020, the United States and China signed a trade agreement, called "Phase One," through which Beijing committed to purchasing additional volumes of American products, including a quota of $40 billion annually in soybeans for two years, totaling $80 billion.

Given the more competitive prices and quality of Brazilian products, however, Chinese importers failed to fully meet these targets. Between 2020 and 2022, China purchased approximately 73% of the target agreed upon with the United States.

In September, China was the destination for 92% of the soybeans exported by Brazil

China concentrates its soybean imports from Brazil between February and September, while the main sales window for American soybeans usually begins then, with the start of the fall harvest in the Northern Hemisphere. US sales generally conclude in February—or, in years when the Brazilian harvest is delayed, in early March.

In 2025, with a new tariff war initiated by Trump, China began applying a 20% tariff on American soybeans. After purchases earlier in the year, still related to the previous harvest, the Chinese market literally did not import a single grain from the US. It replaced American soybeans with imports from Brazil and, to a lesser extent, Argentina.

Data from the Ministry of Development, Industry, Commerce and Services (MDIC) shows that, as of July, China has already begun to increase orders for Brazilian soybeans to reinforce its stocks.

In that month, oilseed cargoes departing from Brazil to Chinese ports totaled 9.6 million tons, an increase of 7.4% compared to the same month in 2024.

The following month, shipments totaled 7.9 million tons, 33.9% more than in August of last year. In September, shipments totaled 6.8 million tons, 57.1% higher than the volume transacted a year earlier.

To give you an idea of ​​the weight of Chinese demand, of all soybeans exported by Brazil in September, 92.3% went to China. In the same month of 2024, the Asian country received 70.6% of Brazilian soybean shipments.

With the latest escalation in tensions between the world's two largest economies – with a 100% US tax on products originating from Xi's country – the expectation, at the moment, is for new and successive export records for Brazilian soybeans in the coming months.

US soybean farmers frustrated by Trump's China policy

While Trump has repeatedly pressured China to buy American soybeans in his speeches, in practice his actions have disappointed the country's soybean producers.

In March, when the US president launched the tariff war by imposing an additional 10% tariff on Chinese products, the American Soybean Association (ASA) said it had maintained “consistently for years” its position of not supporting the use of tariffs as a tactic. of negotiation .

China's last import of American soybeans was in May. Since then, not a single grain has been sold by US producers to the Asian country.

In August, Trump publicly called on China to " quickly quadruple " its soybean purchases from Americans. "Our great farmers produce the most robust soybeans. I expect China to quickly quadruple its soybean orders," the president wrote.

The request, however, had no effect. Days later, ASA sent a letter to the White House asking Trump to prioritize soybeans in US-China trade negotiations.

The entity also released a technical note describing the long-term financial consequences of the loss of market share in China.

At the end of September, the association publicly criticized the US government's announcement of financial aid to Argentina.

"US soybean prices are falling, harvest is underway, and farmers are reading headlines not about securing a trade deal with China, but about the US government providing $20 billion in economic support to Argentina while the country cuts its soybean export taxes to sell 20 shipments of Argentine soybeans to China in just two days," said Caleb Ragland, president of the ASA.

While US soybean farmers are suffering from a complete suspension of sales to the Asian nation, the Argentine government suspended the so-called retenciones (export taxes) on soybeans, soybean meal and oil, corn and wheat, which immediately attracted Chinese buyers and further reduced demand for American products.

The measure, valid until October 31st, negatively impacted the price of American soybeans on the Chicago Board of Trade. Consulting firm Hedgepoint Global Markets states that soybean exports from Javier Milei's country are expected to undergo upward adjustments in upcoming USDA reports, potentially exceeding 10 million tons this year.

Faced with this devastating situation, Trump announced last week that he would provide financial aid to farmers, which, according to American media outlets, should range from US$10 billion to US$14 billion.

The measure is similar to one adopted during his first term, when the Republican also waged a trade war with China. In 2019, the administration provided more than $22 billion in aid to rural producers.

Aid, however, isn't expected to arrive before 2026, according to Dan Basse, president of the consulting firm AgResource. In a video released a few days ago, the executive stated that a short-term transfer was already unfeasible, and the situation worsened on January 1st with the shutdown — the US government's shutdown due to the failure to pass the budget bill by the legal deadline.

Also last week, during a White House press conference, Trump stated that China would resume purchasing US soybeans. "The soybean issue is where I think we'll see more openness," he told reporters.

On the same day, however, the US government announced an additional 100% tariff against China and indicated that the meeting between Trump and Xi scheduled for the end of the month could be canceled. The American Soybean Growers Association reacted, declaring itself "extremely disappointed."

“Trade wars are harmful to everyone, and these latest developments are deeply disappointing at a time when soybean farmers are facing a deepening financial crisis,” Ragland said last Saturday (10).