This article was written by the team of Food Retail Italia, the official representative of the international trade fairs Cibus and TuttoFood Milan in Latin America.
When the U.S.–China trade war erupted in 2018, few could have foreseen how deeply it would reshape the global routes of one of the world’s most strategic commodities: soybeans.
Seven years later, in 2025, the effects are unmistakable. While rural America — from Nebraska to Iowa — faces its worst agricultural crisis since the 1980s, the heart of the global soybean chain has decisively shifted south. Today, it is Latin America, and particularly Brazil, that feeds China’s demand and holds a leadership position that seems difficult to reverse.
For years, Beijing relied on the United States for over half of its soybean imports. But as tariffs and trade restrictions escalated, China progressively reduced its dependence on American producers. Its response was both pragmatic and strategic: replacing the Midwest with a diversified, yet Latin America–centered, supply network.
Brazil, now the world’s largest producer with an estimated 160 million tons in 2025, supplies nearly 70% of China’s soybean imports. In just the first half of the year, Brazilian exports to China surpassed 77 million tons, an all-time record. The ports of Santos, Paranaguá, and Itaqui have become vital hubs for an endless flow of grain shipments — dozens of vessels departing daily toward China’s feed and livestock industries.
Alongside Brazil, Argentina, Paraguay, and Uruguay have also seized the opportunity of this new trade geography. Buenos Aires, after years of heavy fiscal constraints, temporarily reduced agricultural export taxes to stimulate sales abroad — attracting new Chinese contracts and revitalizing production. Paraguay, now the world’s fourth-largest exporter, has upgraded its river logistics along the Paraguay River to boost cargo capacity, while Uruguay, with its efficient agriculture and advanced environmental standards, has carved out high-value market niches.
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A Growing but Still Fragmented Continent
Latin America’s competitive advantage stems from a unique mix of factors: vast fertile land, lower production costs, weak currencies, and the growing adoption of agri-tech innovation.
Brazil has invested heavily in intermodal infrastructure, reducing its long-standing dependence on trucking. New rail corridors linking Mato Grosso to northern ports and the so-called “Soybean Highways” have cut delivery times and boosted competitiveness against the United States.
Yet, the continent remains fragmented. There is still no coordinated agricultural policy, no shared sustainability standards, and no true logistical integration. In countries like Argentina, political instability and chronic inflation continue to hinder investment and stall port modernization.
The New Geography of Soy
The tariff war accelerated an ongoing transformation: the shift of agricultural power from North to South America. The U.S. Midwest, once the epicenter of global grain trade, has lost its privileged access to its top customer. The Latin American soybean corridor, stretching from Mato Grosso to the Río de la Plata, has taken its place — turning cities like Rondonópolis, Rosario, and Nueva Palmira into new global trade hubs.
Multinational traders — from Cargill to ADM and COFCO — are investing billions to expand storage capacity, port terminals, and crushing facilities. Meanwhile, China is not just buying soybeans; it is actively investing in the logistics and processing infrastructure itself, in a model reminiscent of the Belt and Road Initiative.
In the United States, the loss of the Chinese market has been devastating. Soy prices have fallen by 40% since 2022, and millions of tons remain unsold in Midwestern silos. Farming families, whose livelihoods depended for generations on exports to China, now face an uncertain future.
Washington has responded with $10 billion in emergency subsidies, but these measures are merely palliative — the problem is structural, not cyclical.
Meanwhile, Beijing has built long-term partnerships with Latin American suppliers, making a return to pre-trade-war volumes highly unlikely, even if diplomatic relations improve.
Opportunities and Risks for Latin America
The new global balance presents Latin America with an extraordinary growth opportunity. Rising soybean exports and by-product sales have generated record trade surpluses, driven agricultural GDP growth, and attracted foreign capital.
Brazil, in particular, has seen strong foreign currency inflows and a firmer real, while Argentina — despite macroeconomic instability — has temporarily improved its trade balance thanks to the agro-export boom.
However, success also brings significant risks.
The first is overdependence on China: over 70% of Brazil’s soybean exports and 60% of Argentina’s go to a single buyer. Any slowdown in China’s economy or shift in import policy could have immediate and severe consequences across the continent.
The second is environmental. The expansion of farmland into sensitive biomes like the Cerrado and Amazon has reignited concerns about sustainability. Under pressure from European markets and NGOs, major traders such as COFCO and Bunge have adopted the Soy Moratorium, pledging not to source grain from deforested areas after 2008. Implementation, however, remains uneven.
The third risk is infrastructure. Ports, roads, and railways remain insufficient for current export volumes. These logistical inefficiencies increase costs, reduce competitiveness, and limit responsiveness during demand peaks.
Price Outlook
Analysts expect moderately rising soybean prices in Latin America over the next few years. Sustained Chinese demand, constrained global supply, and higher production costs — fertilizers, transport, and labor — could drive a 10–15% price increase between 2026 and 2027 compared to 2024 levels.
The impact will vary: Brazil, with stronger logistics and currency, may see tighter margins, while Argentina and Paraguay could benefit from higher local-currency prices thanks to their more competitive exchange rates.
Conclusion: A New Global Balance
The U.S.–China trade war did more than redraw trade routes — it cemented the shift of agricultural power toward Latin America.
The region has become the backbone of China’s supply chain, and by extension, a key pillar of global food security.
But this new role comes with responsibilities: investing in sustainability, market diversification, and infrastructure will be essential to prevent today’s dependence on China from becoming tomorrow’s vulnerability.
In short, Latin America has claimed the spotlight — but to stay there, it must learn to manage its rise with strategic vision and long-term discipline.
