Brazil will implement a tariff quota allowing the importation of 750K tons of wheat from the United States with zero tariff. The information is in the joint statement released by presidents Jair Bolsonaro and Donald Trump, who met earlier in the week at the White House in Washington. The document does not detail how this import quota will be made or traded. The main external supplier of cereal to the Brazilian market is Argentina. And under current Mercosul rules, member countries can not negotiate trade agreements without involving other partners. And the bloc provides import tariffs for products of other origins. In the case of wheat, the Common External Tariff (TEC) is 10%. Dependent on grain imports, Brazil has zeroed the tariff to ensure supply to the domestic market on some occasions, especially in years of lesser supply availability in Argentina. Despite this prospect of reducing wheat prices in Brazil, one of the countries that may be affected is Argentina, which will feel pressured to lower its prices in order to get the product to the Brazilian market.
Source: Revista Globo Rural