U.S. tariffs on Brazil will reshape global beef trade flows, analysts say

Sao Paulo | Reuters — Higher U.S. tariffs on Brazil are anticipated to reshape world beef commerce flows, sparking elevated shipments to the U.S. from international locations like Mexico and Australia whereas Brazil seeks various markets, analysts stated on Wednesday.

Brazil is the world’s largest beef exporter, with China as its foremost buying and selling associate. In August, Mexico overtook the U.S. to change into its second-largest export vacation spot for the commodity.

“It is vitally possible that international locations that may triangulate Brazilian beef will improve their purchases following Mexico’s instance,” Mauricio Nogueira, director of livestock consultancy Athenagro, stated in an interview. “If Mexico begins sending beef to the U.S., it should purchase from somebody, it should purchase from right here.”

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Argentina could be one other candidate to import and finally re-export Brazil’s beef to the U.S., he added.

Nogueira’s Athenagro didn’t change its year-end projection for Brazil’s beef exports after Trump’s 50 per cent tariffs on the nation’s merchandise took impact on August 6. His consultancy is projecting a 7.5 per cent improve this 12 months in Brazilian beef exports, to three.08 million metric tons. By way of July, such exports rose greater than 13 per cent.

Luis Rua, secretary of commerce at Brazil’s agriculture ministry, stated Brazilian beef helps maintain Mexican inflation in verify. Whether or not Mexico will re-export provides from Brazil is unclear.

“We ship it to Mexico, however we don’t know precisely what Mexico will do with the meat,” he advised Reuters.

Economist Thiago de Carvalho confirmed expectations of a shift in world beef flows, with Brazil probably promoting to markets beforehand served by Australian exporters, for instance.

Elements resembling tight global beef supplies, which the U.S. is dealing with after its cattle herd hit historic lows, may direct demand to Brazil, Carvalho added.

Japan, which historically buys meat from the U.S., could quickly open up for Brazilian merchandise, he stated.

— Reporting by Roberto Samora in São Paulo and Kylie Madry in Mexico Metropolis.