From the beginning of March, the United States and China have announced hundreds of billions of dollars in import tariff which is a tyrannical trade deadlock. Although most market experts believe that the trade war is detrimental to the world economy, but if China needs commodities instead of US goods, it will prompt the export growth of Latin American countries and Australia. The trade war creates potential room for other trade partners to expand their own exports, some countries can indeed benefit from China’s tariffs on US goods.
The current export tariff on American soybeans is 25%. China is known to be the world’s largest importer of the crop and the US has been its second largest supplier. This will negatively impact the US soybean farmers and Chinese pork producers who are relying on agricultural products to feed livestock.
Chinese Vice Finance Minister Zhu Guangyao said in an interview with CNBC which pointed that South American market is the underlying cause of soybean yield increase and Brazil as China’s largest supplier of soybean could be one of the major beneficiaries. At present, there are 75% of soybeans go to China. However, it still cannot fully replace the US ‘s supply.
Latin America Countries（Argentina, Paraguay and Uruguay）
Argentina’s soybean accounted for 17.5% of Argentina’s total exports. It is also in a favorable position as the world’s third-largest soybean exporter. However, commodity analysts predict that crop prices will fall by 25% due to a prolonged drought. Moreover, the huge Chinese market may look for more alternatives, including smaller soybean exporters such as Paraguay and Uruguay.
Each year, the United States exports more than 354 million liters of whiskey to the world. It is the second largest whisky supplier in China after Scotland and sold 926,384 liters to China in 2016，ranked 32nd in the market. However, in the same year, the UK sold more than 11 million liters. Therefore, although tariffs are imposed on whisky, the Chinese market does not seem to matter to American whisky sellers.
Even so, it may only continue to stimulate demand in Scotland, said Francois Sonneville, director of food and agribusiness beverages at RaboResearch. Now for Chinese people who like to buy American bourbon, Scotch is more attractive.
Of course, these tariffs will still hit British and European business in some other parts of the US – so the benefit of this boost to an industry is unlikely to outweigh the costs of other industries.
Another victim of the tariff war is American wine, which will be subject to a 25% tariff if the threat comes into effect. According to Rabobank International, China is the ninth-largest wine buyer in the US. In 2016, the United States imported about 76 million dollars, and its global exports totaled 1.57 billion dollars.
Due to tariffs, a Chinese buyer may go to buy French or Australian wine instead of California wines.” explains Sonneville. France and Australia are already the two largest wine suppliers of China. Therefore, he said that US wine exporters will feel uneasy and have to rely more on domestic demand.