As the tit-for-tat trade war between the United States and China escalates, farmers in Brazil and Argentina are emerging as unlikely winners in a geopolitical storm that’s upending the global agricultural marketplace.

The latest round of tariffs – sparked by former President Donald Trump’s return to aggressive trade policy – has sent American agricultural exports into a nosedive. China, once a major buyer of US soy, beef and grain, has dramatically scaled back purchases, instead turning to the fertile fields of South America to feed its population.

According to recent trade data, Brazil’s beef exports to China surged by a third in the first quarter of 2025 compared to the same period last year. Poultry exports were up 19% in March alone. Meanwhile, Brazilian soybeans – once trading at a discount to their American counterparts – are now fetching a $1.15 premium per bushel (£33.80 per tonne) on the global market.

It’s a stunning turnaround, and one that highlights how quickly agricultural trade flows can shift when political tensions interfere with established supply chains.

“This is a boon for farmers in Brazil and Argentina,” said Ishan Bhanu, lead agricultural analyst at commodity intelligence group Kpler. “These countries are strengthening their positions as long-term partners for Asia – and the effects will last long after the current tariffs fade.”

READ MORE | https://www.thescottishfarmer.co.uk/news/25088298.uk-bans-eu-meat-dairy-stop-foot-and-mouth-disease/

The latest figures echo a wider trend. Between 2016 and 2023, Brazil’s share of China’s food imports rose from 17% to more than 25%, while the US saw its share fall from over 20% to just 13.5%. Argentine farmers have also benefitted, especially in beef, maize, and soybeans.

Brazil in particular has proven adept at capitalising on opportunities created by global trade friction. During Trump’s first term, Brazilian soybean farmers enjoyed a 20% price premium, prompting a wave of investment in ports, processing infrastructure, and logistics. The returns are now paying off again, as Chinese buyers increasingly view Brazil as a reliable – and politically safer – alternative to the US.

The shift goes far beyond bulk commodities. Brazil is fast becoming a major player in animal protein, with rising exports of poultry and pork, and has even made inroads into markets like Japan, traditionally dominated by American beef.

Europe, too, is being drawn into the trade storm, with its feed and protein supply chains feeling the knock-on effects of the US–China tariff spat. As the EU prepares to impose retaliatory tariffs on American soybeans, beef and poultry, buyers across the continent are increasingly looking to South America to fill the gap.

Trade bodies such as the European Feed Manufacturers’ Federation (FEFAC) have warned that Europe will be competing directly with China for limited South American supply, potentially driving up prices and squeezing availability. If Brazil and Argentina cannot meet this ballooning demand, feed costs could rise sharply – with inevitable consequences for livestock farmers and food prices across Europe.

The South American example shows what can be achieved when a country leverages its natural production strengths, invests in export infrastructure, and seizes geopolitical opportunities. Despite the global turmoil, Brazil’s agricultural sector is booming – thanks in part to swift diplomacy and the ability to adapt to shifting global demand.

While the headlines focus on political rows in Washington and Beijing, the real story is unfolding in rural South America – where farmers are harvesting not just crops, but the dividends of a rebalanced global order.