Which countries are poised to gain market share if US-China trade tensions rise?

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Brazil and Argentina Are Poised to Gain Market Share if US-China Trade Tensions Rise

If trade tensions between the United States and China escalate, Brazil and Argentina are expected to increase their global market share through higher exports. This anticipated shift follows a pattern observed during previous trade disputes, where countries like Brazil benefited significantly from lost US trade. Farmers in the United States are expressing concern over the potential for renewed trade friction and its impact on their livelihoods, citing the financial difficulties experienced during the previous trade war.
Brazil Benefited from Lost US Soybean Trade

During the period of retaliatory tariffs imposed by China on US agricultural products, Brazil emerged as a major beneficiary, capturing most of the trade that the United States lost. Specifically, soybeans, which constituted nearly 71 per cent of the total trade loss for the US, saw significant volumes redirected to Brazil. The US Department of Agriculture (USDA) found that retaliatory tariffs between mid-2018 and late-2019 resulted in over US$27 billion in agricultural export losses for the United States, with China accounting for approximately 95 per cent of that value.
China Reduced Reliance on US Agricultural Products

The imposition of tariffs by the United States on Chinese imports, and subsequent retaliation, led China to actively reduce its dependence on American agricultural goods. This strategic shift means that even if trade tensions ease, China's reliance on US products may remain lower than before the trade war. This reduced reliance impacts the potential for US agricultural exports to recover their previous market share, as China has sought alternative suppliers to meet its food demands.
Potential for Reinstatement of Tariffs and Market Share Shifts

A report by the National Corn Growers Association and the American Soybean Association indicates that soybeans and corn, which together account for about one-fourth of the US agriculture export value, could again become prime targets in a future trade dispute. While some tariffs China imposed on US farm products have been granted waivers, these could be reinstated, potentially triggering a substantial drop in US soybean exports. This scenario would further bolster the market share of countries like Brazil and Argentina, which are positioned to increase their exports.

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Which countries are poised to gain market share if US-China trade tensions rise?

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