Brazil looks like a winner in the global trade war

Subscribe to enjoy similar stories. SÃO PAULO—In the unfolding global trade war, Brazil is betting it has some distinct advantages. Chinese buyers are already stockpiling Brazilian soybeans as Beijing retaliates against President Trump’s tariffs with levies on U.S.

agricultural producers. Brazilian suppliers of everything from cotton to chicken are banking on higher Chinese demand. The commodities-heavy Brazilian benchmark stock index is up 9% this year, through Tuesday’s close, while the S&P 500 is down 4.2% over the same period.

The preparations reflect a trade relationship between Brazil and China that has expanded significantly in recent years. Rich in beef, iron ore and oil, Brazil has raw materials that China’s vast population needs. China, meanwhile, has capital that Latin America’s biggest economy needs to build much-needed infrastructure.

At the same time, Brazil sees opportunities to boost exports to the U.S. and to other countries that are being hit by Trump’s tariffs, which his administration is planning to expand for an array of trading partners on Wednesday. Brazil is the biggest producer of footwear outside Asia, and its industry trade association hopes the country will be able to send more shoes to the U.S.

in place of Chinese products, which would be a boost for a country trying to sell more value-added goods. Brazil could see additional tariffs from the U.S. on Wednesday, when Trump is expected to impose new duties on much of America’s imports.

But China is likely to face higher tariffs, giving Brazilian products a relative advantage. And though Trump has noted Brazil’s own high tariffs, the U.S. has long had a trade surplus with the country, which economists think could help insulate it.