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Chicken Giant BRF Sees Trump’s Trade War Boosting Brazil Sales

A worker places chicken breasts in a machine to be weighed and packaged in the butcher section of a Stew Leonard's supermarket in Paramus, New Jersey, U.S., on Tuesday, May 12, 2020. Stew Leonard Jr. said that meat packing plant the company uses is operating at about 70 percent capacity, and he expects it to rebound to full capacity in about a month, CT Post reported. Photographer: Angus Mordant/Bloomberg (Angus Mordant/Bloomberg)

(Bloomberg) -- BRF SA, one of the world’s largest chicken suppliers, expects Brazil to benefit from a potential trade war between the US and China when Donald Trump takes over next year.

A move by the Trump administration to restrict imports from China — a major US chicken importer — may lead the Asian nation to retaliate. That would divert some of its meat purchases to Brazil instead, according to Leonardo Campo Dallorto, BRF vice-president of international market and planning.

More shipments to China would cement Brazil’s role as the world’s largest chicken supplier. The South American nation is expected to account for roughly 36% of global exports next year, which compares with 22% for the US, according to a US Department of Agriculture projection. 

Brazilian producers such as BRF took advantage from the country’s ever-growing supplies of corn and soybeans to expand poultry production. Meanwhile, output in the US has been constrained by a bird flu outbreak and a decline in egg fertility.   

Trump has proposed a 10% to 20% tariff across the board on all imported goods into the US, and a 60% tariff on Chinese products. 

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