US/China trade war could boost Brazil soy export, Amazon deforestation

  • President Donald Trump is pressing hard for a trade war with China. So far, he has imposed $50 billion in tariffs on the Chinese, and threatened another $200 billion; the Chinese are retaliating. An all-out U.S./China trade war could have serious unforeseen repercussions on the Brazilian Amazon, including increased deforestation, intensified pressures on indigenous groups, and escalated climate change.
  • The concern is that China will shift its commodities purchases, including beef and soy, away from the U.S. to Brazil. The Amazon and Cerrado biomes are already major exporters of both commodities, and are creating a boom in infrastructure construction to bring those products to market. Even without a trade war, experts expect Brazil to edge out the U.S. this year as the world´s largest soy producer.
  • The U.S. tariffs may already be prompting a shift in trade. Trump first threatened China with tariffs in January. By April, U.S. soy sales to China were down 70,000 metric tons compared to the same period last year. Data also shows a surge in Brazilian Amazon deforestation between February and April of 2018, compared to 2017, a possible response by Brazil soy growers eager to profit from a trade war.
  • If the U.S./China trade war results in a significant surge in Brazilian commodities production, deforestation rates there could soar. Scientists worry that Amazon deforestation, now at 17 percent, could be pushed past a 20-25 percent climate tipping point, converting rainforest to savanna, greatly swelling carbon emissions, and potentially destabilizing the regional and even global climate.
Munduruku warriors wearing ceremonial face paint used to welcome village visitors. The Munduruku fiercely oppose Brazilian plans to build mega-transportation infrastructure projects in their Amazon territory. Photo by Mauricio Torres.

“We are the ones who care for nature,” says Alessandra Munduruku, a young Munduruku indigenous leader in the Brazilian Amazon. “It isn’t someone coming from on high who’s going to teach us about caring for the forest.” Alessandra first joined her community’s fight for survival when it was threatened with flooding by the São Luiz de Tapajós mega-dam project. Although plans for the dam are shelved for now, Alessandra says the Munduruku still face threats to the survival of their culture and community.

One unexpected menace: President Donald Trump’s bluster over tariffs and trade, which pushed up the price of Brazilian soybeans earlier this year. Since the Amazon region is a hub for soybean production, the price increase could lead to greater deforestation there. Now, with the U.S. already imposing $50 billion in tariffs on China; the Chinese retaliating equally; and Trump threatening another $200 billion in tariffs, an all-out trade war looms. The repercussions of such a war would threaten the Munduruku and the Amazon.

“What affect us directly are the railway, the canal, the ports,” Alessandra says. “There are three [ports] already, and they want to build 20 more.” She is referring to the new transportation infrastructure and grain silos that dot the shore of the Tapajós River, an important Amazon River tributary, and the home territory of the Munduruku. Those silos are filled with soy being transported from Mato Grosso state, in Brazil’s interior.

The Santarém fish market in the Brazilian Amazon. The Cargill commodities terminal, through which large amounts of soy move annually, looms in the background. Photo by have Thais Borges.
In 2015, an indigenous alliance launched an unsuccessful protest demanding that the Brazilian government halt Amazon dam construction. Indigenous and traditional communities have since joined together to fight the expansion of commodities transportation infrastructure throughout the region. Photo courtesy of Amazon Watch.

The expansion of industrial agribusiness, especially beef and soy production, in Mato Grosso and other Amazon states is steadily cutting away at the Amazon rainforest. This, along with the construction of infrastructure to support moving these products to market, is putting increased pressure on indigenous and traditional communities that inhabit the region. Researchers also point to the neighboring, lesser-known Cerrado biome as another deforestation hotspot; it too is home to numerous indigenous groups and site of a Brazilian soy and cattle boom.

Even though Trump´s escalating U.S./China trade war has yet to fully make its international effects felt, it may already be impacting Brazil´s forests negatively. Data from the rainforest monitoring organization Imazon, shows a surge in deforestation between February and April of 2018 compared to last year. That timeline aligns with the President’s first threat of tariffs against China made in January.

In March, Trump officially announced $50 billion in tariffs on Chinese goods coming to the United States. Beijing struck back by declaring $300 billion in taxes on U.S. products headed to China, including soybeans. As of May 10th, U.S. soybean sales to China were down by roughly 70,000 metric tons compared to the same period last year. This drop suggests that Chinese buyers have been seeking other suppliers just to be safe, no matter whether the trade war is on or off.

Amazon rainforest converted to soy. The U.S./China trade war could cause the Chinese to replace soy purchases from the U.S., to buying from Brazil instead, resulting in a rapid rise in soy production there, leading to greater Amazon and Cerrado deforestation. Photo by Mayangdi Inzaulgarat.
Map showing the extensive deforestation occurring in the northern part of Mato Grosso state between 1986 and 2016 to accommodate soy and beef production. In just 40 years, the advance of agribusiness has radically reduced forest coverage. The U.S./China trade war could lead to soy expansion in the Amazon, where it has been dramatically slowed in recent years by the Soy Moratorium. Map by Maurício Torres.

Analysts say that Brazil is positioned to replace at least part of the soybeans China ordinarily buys from the U.S. as President Trump provokes the Asian trading giant’s ire. Brazil already expects to ship 56 million metric tons of soybeans to China this year, with the Amazon region and the Cerrado providing much of that amount. This year, experts expect Brazil to edge out the United States as the world´s largest producer of soybeans, growing 117 million tons.

Likely in preparation for a big boost in China/Brazil commodities trade, the Chinese in 2017 offered the Brazilians a $20 billion infrastructure investment fund package, which could pay for new roads, railways and industrial waterways for soy transport – likely leading to more Amazon deforestation and more disruptions of indigenous life.

Experts can clearly point to industrial agribusiness and the global trade in soy as a contributor to deforestation in the Brazilian Amazon. For example, forest watchdog Imazon correlates a drop in Amazon forest clearing last year to a decrease in commodity prices, including both beef and soybeans. This is the opposite of what is happening currently.

Amazon deforestation is often a multi-step process, as land uses change. The process typically begins when elite land grabbers lay claim to forests. Illegal logging and land clearing for cattle production often follows. Later, old pastures are converted to soy growing. Photo by Sue Branford.
Deforested plain in the Brazilian Amazon, now used for cattle. Trump’s U.S./China trade war could not only up Brazilian soy production, but also beef production, a primary cause of Amazon deforestation. Rhett A. Butler.

Importantly, Amazon deforestation could trigger significant climate impacts not just in South America, but around the world. Scientists reported in Nature Climate Change that cutting down large numbers of trees in the tropics can adversely affect rainfall patterns in other parts of the world. More sobering still, renowned researchers Tom Lovejoy and Carlos Nobre warned this March that Amazon deforestation, currently around 17 percent, if pushed to 20-25 percent could result in the passing of a climate tipping point that would reduce Amazon rainfall and lead to the conversion of large swathes of rainforest to savanna. That loss of the Amazon’s ability to store vast sums of carbon could dramatically increase greenhouse gas emissions, escalating climate change to dangerous levels.

Still, Jair Schmitt, Director of Brazil’s Department of Forests and Deforestation Prevention, has faith in current protection measures aimed at curbing future deforestation. These include the country’s forest code and the Soy Moratorium, a voluntary agreement arrived at by agribusiness, environmental NGOs led by Greenpeace, and the government. “Even if the demand for products can influence deforestation, it’s the market itself that is putting restrictions on illegal deforestation,” Schmitt says.

The Soy Moratorium was launched in 2006 with the aim of preventing the spread of new soy plantations into the rainforest, and to directly prevent forest clearing to make way for soy. That agreement has kept new deforestation for soy production to below 1 percent in the Brazilian Amazon, but it hasn’t ended forest clearing.

Critics of the Soy Moratorium say that the agreement contains large loopholes. One example: land thieves clear native forests, move cattle onto the land, then sell those pastures to soy growers, a multi-step process not counted under Soy Moratorium rules. Likewise, with the 2012 Brazilian forest code, which was recently weakened substantially by a Brazilian Supreme Court decision, according to experts.

Legal Amazonia encompasses all of the Amazon biome, plus a portion of the Cerrado biome. The Amazon Soy Moratorium covers only the Amazon, and none of the Cerrado, so would not protect that biome from a surge in soy production brought on by the U.S./China trade war. The map also shows two major infrastructure projects, the completed BR-163, used to transport soy, and the as yet unpaved BR-319. Map by Mauricio Torres.
Archer Daniels Midland (ADM) soy silos in Mato Grosso state, Brazil. Transnational commodities companies like ADM, Cargill and Bunge will all likely profit from boosts in Brazilian soy production brought on by a shift in trade with China. These companies have long resisted any serious attempt to slow soy expansion in the Cerrado, where soy production is experiencing a record boom. Photo by Thaís Borges.

While the world has shone a spotlight on deforestation in the Amazon, it isn’t the only region where trees are felled for soy. The Cerrado, the vast savanna in north-central Brazil is presently seeing the nation’s most rapid shift from native vegetation to soy, cotton, corn. Dr. Holly Gibbs, a supply-chain researcher at the University of Wisconsin-Madison, calls the Cerrado the new deforestation “hotspot.”

“Soy is a relatively minor cause of deforestation in the Amazon” today, Gibbs says, with “cattle ranching account[ing] for 60-80 percent of the new deforestation.” Yet, because areas initially cleared for livestock can later be transformed to soy fields, that deforestation story isn’t so cut and dry. Adding to that complexity, soybeans also provide important fodder for livestock, enmeshing the two commodities further. Another complication: if Trump’s tariffs result in the Chinese imposing retaliatory tariffs on U.S. beef, the Chinese might then up purchases of Brazilian beef. China and other Asian nations have seen their beef consumption and imports soar in recent years – more potential bad news for the Amazon.

Gibbs’ research found that even with the Soy Moratorium, more than 600 soybean farms violated the country´s forestry laws and cleared forestland illegally. The study reviewed satellite images of the Amazon gathered between 2001 and 2014 and of the Cerrado between 2001 and 2013. In addition, only 115 of those farms were banned from selling soy because of loopholes in the agreement. The Soy Moratorium only covers the portion of a plantation where soy is grown, and not the entire farm. Loopholes such as this leave wiggle room that allow for more tree removal, say environmentalists.

Truck traffic on the BR-163 in the Amazon at the height of the soy harvest. The paving of the BR-163 created greater access to the rainforest, and led to surge in deforestation that is still underway. Conservationists fear that Brazil’s plans to pave the BR-319 in the Madeira River basin could pose the next major transportation infrastructure threat to the Amazon. Photo courtesy of Agência Brasil.
An Amazon grain terminal at twilight. International and Brazilian agribusiness interests are pushing hard to turn the Tapajós basin and Madeira basin into an industrialized commodities transportation corridor to handle expanded soy production coming out of Brazil’s interior and being shipped ultimately to China and Europe. Photo courtesy of Mayangdi Inzaulgarat

Conservationists also warn against the rapid expansion of infrastructure needed to ship commodities. New roads, railways and industrial waterways directly cause Amazon deforestation, while also dramatically increasing rainforest access for land thieves, illegal loggers, cattle ranchers, soy growers, mining operations, and new settlers.

One organization that is challenging unregulated agribusiness growth is Instituto SocioAmbiental (ISA), the Socio-Environmental Institute, an NGO dedicated to social and environmental justice. ISA’s Rodrigo Junqueira says the prospect of a U.S./China trade war is exciting soybean growers: “[They] are betting that an increase in demand is going to put pressure on the market, and so whatever [legal] restrictions exist will be dropped.

“If the demand increases, and Brazil becomes a more important supplier as a result, soybean cultivation will increase in the Cerrado and the parts of the Amazon that are suitable,” Junqueira maintains. He adds that a surge in global soy demand will almost certainly produce “a territorial dynamic that will lead to new deforestation.”

For Alessandra Munduruku, agribusiness expansion poses an existential threat to the Munduruku people. “The fight is for our land. The fight is for a little bit of land,” she says. “Even if people come to talk [to us] about forest management, capitalism comes to teach you to be ‘sustainable.’ But that mini-capitalism is where individualism begins.” Individualism, she says, with its built-in competiveness, will ultimately lead to the end of the forest, the demise of community-focused indigenous cultures, and to the end of the Munduruku.

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The Brazilian Amazon continues to be at serious risk from deforestation, despite the protections provided by the nation’s forest code and the Amazon Soy Moratorium. Trump’s U.S./China trade war seems likely to worsen the deforest threat, according to analysts. Photo by Mauricio Torres.

This story first appeared on Mongabay

South Africa Today – Environment

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