Which countries emerge victorious from the trade war? The US-China conflict creates opportunities for Latin American markets
Rising tensions between the US and China, which are respectively the world's largest supplier and consumer of agricultural products, have created an opportunity for Latin American countries to increase exports of products such as meat and grains.
The next opportunity to benefit is meat. Tariffs imposed by US President Donald Trump on eight of the top ten buyers of US beef have already reshaped trade flows, boosting Brazilian beef exports to markets such as Algeria and Turkey.
Japan, the second-largest customer of American beef, is now in advanced negotiations to begin importing cheaper meat from Brazil.
Furthermore, any economic slowdown caused by the trade war will push other international beef buyers to turn to lower-cost suppliers, particularly in Brazil, according to market analyst Datagro.
Brazil and Argentina benefit from trade war
So far, China's move away from American products appears to be a key factor boosting Brazilian and Argentine exports.
In April, the Asian superpower ordered large quantities of soybeans from Brazil, giving the country a significant advantage in agricultural competition with the US, while it recently reached an agreement to resume poultry exports from Argentina.
Increasing exports to Europe is also an opportunity, as negotiations for a trade agreement between Mercosur, the Latin American trade union, and the European Union are gaining momentum.
Argentine sorghum producers could also benefit from higher prices, as there are few alternative suppliers of the grain used as animal feed. China is the world's largest buyer and the United States is the main supplier.
If trade restrictions continue into the fall, when the U.S. begins harvesting soybeans and corn, Latin American grain producers will have another opportunity to provide alternative supplies.
However, price volatility in agricultural markets remains a risk for all exporters. While soybean prices in Brazil and Argentina initially rose after the tariff announcements, a global recession is likely to reduce demand and lower futures contract prices.
According to experts, "an economy that imports beef is more likely to consume cheap meat than expensive meat."
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