Tariff shift boosts China-Brazil dry bulk trade, US set to lose market share

According to shipbroker SSY, citing Brazilian customs data, China imported 11.10M tonnes of soya beans from Brazil in March, the highest monthly volume since April 2021 and the second-highest on record.

SSY senior dry bulk analyst William Tooth noted the US planting season does not begin until May, meaning the impact of recent tariffs will likely be felt in the fourth quarter, when shipments ramp up. However, he drew a comparison to Q4 2018, during Donald Trump’s presidency, when US soya bean shipments to China plummeted to just 0.34M tonnes from 17.40M tonnes the previous year. A similar decline is expected if current tariffs remain in effect.

In a recent report, BIMCO highlighted that as China redirects its exports to other destinations, the US may try to compensate by increasing shipments to Europe and Asia. However, this may prove challenging for soya beans, as China accounts for 68% of global demand.

SSY also pointed out a long-term decline in US agricultural dominance. Production of corn, soya beans, and wheat – the three key dry bulk agricultural commodities – peaked in the 2016/17 trade year and has since plateaued. In 2000/01, the US accounted for 43% of global corn and soya bean output, and 10% of wheat. By last year, those shares had dropped to 32%, 29%, and 6%, respectively.

In shipping terms, SSY reported nearly 70% of US seaborne soya bean exports last year were transported on Panamax vessels, with about a quarter on Handymaxes and the rest on smaller ships. A sharp reduction in Chinese demand would disproportionately affect the Panamax segment.

Weaker growth forecasts

The tariff escalation has led analysts to lower expectations for the dry bulk market. BIMCO shipping analysis manager Filipe Gouveia forecasts a weakening supply-demand balance, revising cargo demand growth down 0.5 percentage points in 2025 and 2026, since the last market update. 

BIMCO expects ship demand to stagnate in 2025 and grow by just 1–2% in 2026, while ship supply is forecast to grow by 1.5–2.5% in 2025 and 2–3% in 2026.

According to BIMCO, the new tariffs introduced by the US and China are likely to directly impact 4% of dry bulk tonne-mile demand. The affected cargoes are primarily transported by Panamax, Supramax, and Handysize vessels.

Meanwhile, iron ore shipments are projected to remain flat through 2026, while coal shipments are expected to decline by 4% over the same period.