At the agricultural fair along Highway 158, the cowboy hats were on and the mood was festive. A decadent arrangement of fine cheeses, fresh fruits and sausages had been spread out across several tables. People were joking around, sipping guaraná, the local soda, and admiring expensive farming equipment draped with the Brazilian flag.
Why Brazil’s soy farmers love Trump and his tariffs on China
In the heart of Brazil’s soy country, there was reason to celebrate: Donald Trump had reignited a trade war with China, and farmers here were ready to reap the rewards.
“The United States is provoking this fight,” said soy farmer Wesley Moacir Rosa, 50. “But it is Brazil that is going to end up benefiting.”
China is by far the world’s largest market for soy, importing more than 100 million tons each year to sustain its vast hog farms. For years, this was a boon for both Brazilian and American farmers. Together, they supplied the bulk of China’s demand for soy, and the product became the top agricultural export for both countries.
But the first trade war between Trump and China in 2018 sent American exports plummeting. Brazil overtook the U.S. as the world’s largest soy producer and, by last year, accounted for more than 70 percent of soy exports to China.
Expecting a record harvest this year, Brazil is poised to solidify its dominance.
An analysis from EXAME, a Brazilian business magazine, showed the country’s soy industry could pocket an additional $7 billion as a result of the tariffs. “Brazil has more than enough capacity to meet a rise in Chinese demand,” said Maurício Buffon, the president of the Brazilian Association of Soy Farmers. “The Brazilian farmer has already proven himself to be extremely efficient.”
Last week, Yuyuan Tantian, a Chinese blog affiliated with the state broadcaster CCTV, said that Brazilian soy shipments to the Chinese port, Zhoushan, were already up nearly 50 percent. Agricultural exports from the U.S., including soy, were “easily replaceable,” Zhao Chenxin, deputy director of the National Development and Reform Commission, told reporters, according to Bloomberg News.
As the global economy steels itself for a protracted feud between the U.S. and China, the international soy trade shows how quickly world markets can circumvent disruptions and recalibrate — and how seemingly temporary shifts can become permanent. If trends from 2018 continue, soybean farmers in the U.S. could struggle to recoup lost business to Brazil, which has ample land to expand operations.
Scott Gerlt, chief economist at the American Soybean Association, said U.S. farmers are deeply dependent on trade with China, which normally purchases about 1 out of every 3 or 4 rows of their soybeans. But a 125 percent tariff — imposed by Beijing last month in response to Trump’s 145 percent tariff on Chinese goods — would effectively cut off farmers from the world’s second largest economy.
“It’s crippling when you lose 30 percent of your demand in a short period of time,” he said. He said some farmers — already losing money and under pressure from overhead costs and the depressed international price of soy — are questioning whether they can continue production.
“There is a lot of consternation right now,” Gerlt said. “Farmers are very stressed.”
Jim Sutter, chief executive of the U.S. Soybean Export Council, said many producers remain hopeful that Trump will ultimately find a beneficial solution. But continued uncertainty and memories of the last trade war are increasingly testing their optimism.
“People ask, ‘Who were the winners and losers?’ ” Sutter said. “The winners were Brazilian farmers, and the losers were the Chinese consumers and the American soy farmer.”
That Brazil is even a global competitor in soy production, let alone the world’s largest producer, is a relatively new phenomenon. The crop has historically been cultivated in colder climates. But Brazilian agricultural scientists, working under the military dictatorship that governed the country from 1964 to 1985, were able to generate new varieties of the soybean that could thrive in Brazilian soil. It was called the “tropicalization” of the soy bean.
Since then, cultivation has moved north from Brazil’s colder southern states, becoming an economic and cultural force across the country’s vast interior, where politics run conservative, farmers wear cowboy hats and the bars blast country music. Much of the growth has come at the expense of forests in Brazil’s Cerrado and Amazon regions.
The economic promise and environmental peril of soy’s runaway growth were on vivid display in the Amazonian city of Confresa, a leading producer in Brazil’s soy capital, Mato Grosso state. The city is technically a part of Brazil’s Amazon biome, but it felt more like the American Midwest. Much of the forest was gone. Large stores selling agricultural products and massive farming equipment lined the city’s main thoroughfare.
Further environmental destruction in Brazil could be another consequence of Trump’s trade war with China, analysts said. As market demand grows, there will be greater pressure to convert more land into soy plantations, accelerating rates of deforestation in regions already under threat.
“And that is a concern for the world,” Sutter said.
But at the agricultural fair, the biggest worry was the diminished international price of soy, which had plunged amid larger than expected supply, from a high of $17 per bushel in 2022 to around $10 per bushel.
One producer, José Francisco Paludo, 56, who owns a 741-acre soy plantation, complained: “The price is terrible!” But he was heartened by the return of Trump, a figure he had long admired.
“I’m starting to get more optimistic,” Paludo said, munching on cheese. “Things have to improve.”
Nearby, fair organizer Beatriz Costa, 27, was glad-handing her way through a group of farmers. Smiling beneath her cowboy hat, she was thinking about the future. Things looked good.
The trade war, she said, “is really encouraging for us in agriculture.”
A Trump supporter, she gave thanks to the U.S. president.
“We’re hopeful,” she said.
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