Some on the sidelines of the trade war could come out ahead, as companies shift production to avoid tariffs. Instead of “onshoring,” or bringing factories or farms back to the United States from China, firms are looking for replacement countries.
Potential winners include:
Argentina and Brazil. South American soybean farmers are expected to pick up the slack from falling U.S. soybean exports to China, which has historically been the top destination for U.S. soy.
Brazil saw strong demand for its soybeans as China shifted its purchases to other suppliers. But the outlook for South American exporters has been clouded by other factors, such as Chinese goodwill purchases of U.S. soybeans in early 2019 and an outbreak of African swine fever in China, which has weakened demand for soy pig feed.