The European Commission has announced retaliatory tariffs on US corn and soybeans imports in response to US President Donald Trump’s steel and aluminum tariffs.
“Our countermeasures will be introduced in two steps; starting with April 1 and fully in place as of April 13,” EC president Ursula von der Leyen said.
For the first step, the EU will reintroduce suspended 2018 and 2020 import taxes, including a 25% tariff on US corn imports. In the second step it will impose a new package of additional measures on US-origin products, including soybeans, which will be declared after discussion between member states.
According to market analysts, this is bad news for US farmers as about 3 million-4 million mt/year of US corn is exported to the EU.
“The US typically supplies 3-4 million mt of corn to the bloc, which roughly accounts for 4% of total US corn exports, amounting 60 million mt a season,” a Black Sea market expert said.
Tariffs on US soybeans will have an even bigger impact on US farmers, one analyst said, pointing out that the US ships around 5 million-7 million mt of soybeans to the EU annually, which accounts for more than 10% of total US exports.
“They [US farmers] would struggle to sell crops like soybeans and corn,” another trade source said.
Impact on EU livestock sector
Market participants have expressed mixed opinions on the impact of the US corn import tariff on the EU livestock sector.
According to grain analysts, the EU livestock sector is believed to be most affected as farmers rely mostly on US corn to feed their animals. An EU market analyst said the tariff on US corn would significantly disrupt the livestock sector, which heavily relies on imported corn for animal feed.
“Spain, one of the biggest buyers of US corn, may face higher costs, reducing the competitiveness of EU livestock production,” the analyst said.
The European Feed Manufacturers’ Federation also warned that the new tariffs would make animal feed more expensive and hurt local meat and dairy producers.
This could lead to increased reliance on alternative feed sources or suppliers, potentially raising overall production costs and affecting meat prices, analysts said.
However, traders said they believe the impact on corn pricing and imports into the EU will be minimal. Many had been expecting tariffs previously and had shifted sourcing to Ukraine despite the US being the cheapest origin.
A Netherlands-based corn buyer said: “It was already in the cards, so it does not really change things as of now.”
Spanish traders said they do not expect the tariff to severely affect the flow of corn to the market, although they will be forced to source their corn from more expensive origins.
A Spain-based market source said: “As of now, the difference between US and Ukraine CIF Spanish Mediterranean is about $10/mt at least.”
The share of US corn in the Spanish market had been low in recent years as Ukrainian corn dominated the Spanish market. However, traders said sourcing was more diversified this season, with a higher influx of US corn into Spain.
Market participants are awaiting the actual implementation of the tariff in April to assess its ultimate effect on the market. A broker based in Spain said: “It should be implemented in April, but in reality, the EU can again postpone implementation.”
In Italy, the impact is expected to be minimal, as it cannot import US corn due to issues with genetically modified organisms. However, Italian buyers are concerned about rising premiums for South American corn. A feed mill buyer said: “So far, the only issue is the increase in the Brazilian premium.”
South America, Ukraine to replace US corn
The EU’s tariffs on US corn and soybeans will likely accelerate diversification in the EU’s grain import landscape, with Brazil and Argentina expanding their presence as alternative suppliers.
“Brazil, in particular, has been expanding its corn exports, supported by competitive pricing and robust production,” a market expert said.
“Brazil, Argentina and Ukraine are well-positioned to replace US corn in the EU market,” another trade source said.
However, industry experts also believe that while these alternatives are competitive, logistical challenges and potential quality differences might limit their ability to fully substitute US corn.
The shift could also push the EU to explore more sustainable or localized feed solutions, though this would require time and investment, an EU grain expert said.
