The US tariff war against Brazil takes its toll on China

In a move that was foreseeable, President Donald Trump’s announcement last week to raise tariffs by 50% on all Brazilian products from Aug 1st has impacted price dynamics in China, the world’s largest beef importer. With Brazil virtually out of the US market (if Trumps’ announcement is confirmed) Chinese importers took advantage of the situation this week to submit lower bids to close deals with their main supplier. Brazilian industry sources acknowledged that prices may drop by US$/t 100-200 this week. In fact, for the mix of round cuts, which was around US$/t 6,600 CFR, import offers were now coming in at US$/t 6,300. “It’s more profitable to supply Chile or the domestic market,” the source explained.