The escalating trade tension between US and China will likely further reduce China’s soybean imports dependency on the US by diverting part of its soybean imports to South America. This will benefit Brazil and Argentina, the world’s largest and third largest soybean producing countries. It may also result in replacement of China’s soybean demand to palm oil as a substitute.

What happened during the first US-China tariff tension in 2018?
Recall, China’s move to impose a 25% tariff on US soybean imports in retaliation against US tariffs) had resulted in China’s soybean imports from US declining by 57% (or 18.6m metric tons) in 2018. During the same time, its soybean imports from Brazil rose by 41% (or 21.8m metric tons) and resulted in China’s palm oil imports increasing by 5% to 5.3m metric tons.

Tariffs have muted impact on US palm oil demand
The impact of US tariff on America’s palm oil demand, on the other hand, will likely be muted. In 2024, US imported a total of 1.8m metric tons of palm oil, mostly from Indonesia.

Source: HLIB Research 17/4/25