Yet the tariff will also be damaging to China, said Even Pay, a senior agriculture analyst with Beijing-based advisory firm China Policy. 'In the short term, China is likely to look to make up for soy imports from anyone willing to sell, with Brazil, already the world’s largest soybean producer, likely to benefit. But China’s big farms are much more dependent on bulk commodity feeds than many realize. Brazil can’t export enough to meet their needs, and they can’t easily make up the lost feed with scraps from elsewhere.'
The tariffs are nevertheless a boost for Brazil, which appears to be buying U.S. soybeans at cut prices while exporting its own produce at higher rates. Last month, China’s Ministry of Finance announced that it will remove tariffs on soybeans from five countries, including India and Bangladesh. But because these countries are not major soybean producers, the move was largely symbolic, Pay said. 'There is a lot of chatter in Chinese media and policy circles about reducing China’s dependence on a few suppliers such as the U.S. by boosting agriculture projects among countries participating in the Belt and Road Initiative,' Pay said, referring to China’s major infrastructure development push. 'Long term, the soybean tariff will help garner support for Belt and Road projects.'