News and politics by Abdullah Afridi - Dailymotion

Abdullah Afridi

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00:00This export terminal is one of the world's biggest outside China.

00:04It has been built in Brazil, just outside Sao Paulo, by the Chinese state agricultural giant,

00:09COFCO. At the cost of $285 million, it could spell the loss of billions of dollars in revenue for

00:16American farmers. Here's why. Beijing has spent hundreds of billions of dollars on American

00:25agricultural products over the last decade, making China one of the top markets for American

00:31farmers. We'll be discussing trade. In 2018, Washington introduced the first

00:36tranche of tariffs on China and Beijing retaliated with tariffs of its own. But the dip in trade

00:42was short-lived and China's demand for American agricultural produce recovered and even boomed

00:47in the following years. But the fallout from the first trade war left Beijing looking for

00:52other suppliers. Rich in beef, raw materials and crops, Brazil has become the number one

00:58food supplier to China, overtaking the US. Brazilian agricultural exports to China reached a record

01:04high of around $60 billion in 2023. But thanks to this port in southeastern Brazil, that relationship

01:11is set to become even more lucrative. In 2024, the Port of Santos handled a record

01:17180 million tons of cargo, of which more than half was agricultural goods such as corn, sugar and

01:25Brazil's key export, soybeans. Brazil's soybean exports are worth over $50 billion and about 30%

01:34of that trade passes through Santos, mainly on its way to China. But the port can hardly keep up.

01:41Today, more than 90% of the port's capacity for exporting agricultural bulk goods is in use,

01:47according to logistics consulting firm Macroinfo. That's why Kafka is building this export terminal

01:53here at the ports. The state agricultural giant hopes to expand its capacity for exports from 4.5

01:59million tons to 14 million tons, bringing billions of dollars in revenue. But in the US, farmers worry

02:06that this increase could be achieved at their expense. Trump's first trade war led to more than $27

02:13billion in losses of agricultural exports, according to USDA research.

02:18We have a trillion dollar trade deficit with China. Hundreds of billions of dollars a year

02:24we lose with China. And unless we solve that problem, I'm not going to make a deal.

02:29Since Trump's return to office, China has found itself under renewed pressure and American farmers are

02:35bearing the brunt. Export data in April showed China was already cutting back on US soybean purchases.

02:41It has also reduced the amount of pork it plans to import in 2025.

02:46As Trump urges Beijing to quadruple its purchases of American soybeans in a bid to reduce the trade

02:52deficit, the expansion of the port will allow China to buy even less from the US.

02:58The Santos port fits into Beijing's wider plan to access South America's agricultural bounty,

03:04as China suffers from a lack of water and arable land at home.

03:09Chinese companies are laying hundreds of miles of railroad across Brazil's agricultural heartland.

03:15And they're even planning an ambitious rail project to link those regions to China's $3.5

03:21billion megaport in Peru. This nearly 3,000 mile long railway could shorten export times from Brazil to

03:28Asia by up to 10 days, according to China's state media. Still in its early stages, this would be an

03:35unprecedented endeavor for the continent. But while this booming relationship with China promises

03:42billions of dollars in revenue, there is a threat for Brazil. Brazil is now facing one of the fastest

03:48processes of deindustrialization in the world. Over recent years, Brazil has increased its exports of raw

03:54materials to China, while China has shipped manufactured goods to Brazil. That's had a devastating impact on

04:00Brazilian factories over recent years, leading to job losses and a reduction in manufacturing as part of

04:06the country's GDP. The new terminal in Santos threatens to further contribute to the country's growing

04:13deindustrialization. For a while, it looked like Brazil would be a rare winner in Trump's trade war.

04:21It was going to export more agricultural goods to the US and to China, as both countries were locked

04:26in a bitter dispute over trade. But recently, Trump imposed a 50% tariff on many Brazilian goods.

04:33That's one of the highest in the world. And it's partially linked to a criminal case here in Brazil

04:38against the former right-wing president Jair Bolsonaro. He is on trial for allegedly plotting a coup

04:44in the country in 2022. He is one of Trump's closest allies. And Trump has said the case is a

04:50witch hunt against the right in Brazil. The Brazilian government understands that this increase in

04:55tariffs is a way to pressure the government and the courts to drop the case against Jair Bolsonaro.

05:01But they've made it very clear that that's not going to happen. China is already Brazil's biggest

05:06trading partner. But the increase in tariffs from the US and Costco's new terminal are likely to push them

05:13even closer together.

How China’s $285M Export Hub in Brazil Will Cost U.S. Billions _ WSJ Center Point

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