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China to boost food imports from Latin America, Europe as US trade war escalates
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China to boost food imports from Latin America, Europe as US trade war escalates
Mar 5, 2025 1:38 AM

SINGAPORE/BEIJING (Reuters) - China's new tariffs on U.S. farm goods are poised to reshape global trade flows, prompting the world's top agricultural importer to source more meat, dairy and grains from countries in South America, Europe and the Pacific.

Shipments to China from key soybean supplier Brazil, top wheat exporter Australia and major pork supplier Europe, could surge as a trade war hots up between the world's largest economies, industry officials and analysts said.

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

"There will be rerouting of trade after China's import tariffs on U.S. 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 is the largest market for U.S. 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 U.S. 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 U.S. agricultural export industry.

NOT ENOUGH CHICKEN FEET

China imported $16.26 billion worth of U.S. beef, pork and chicken, including offal in 2024, but in its counteroffensive, it has unveiled tariffs of 15% on U.S. 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 U.S. chicken feet, pork ears and offal - items valued in its cuisine, but in little demand in the United States.

MORE BRAZILIAN, AUSTRALIAN GRAINS

About half of U.S. 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 U.S. 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," said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.

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 U.S. wheat is also expected to favour Australian suppliers, although China has reduced overall wheat imports in recent months amid ample local supplies.

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