Brazil and China are talking trade. Here’s how they can deliver on sustainability goals

The first quarter of 2025 has been marked by record-breaking developments in the Brazil-China soy trade. Brazil is expected to produce around 167 million tonnes of soybeans in this year’s harvest – an increase of 20 million tonnes on last year.

At the same time, China’s soybean imports from Brazil reached a new high. In March 2025, Brazil exported approximately 15.7 million tonnes of soybeans, three-quarters of which were destined for China. This is the highest amount for the month ever exported to China.

While China’s demand for soy has risen over the past 20 years as its economy has grown and living standards have increased, its reliance on Brazilian soy looks set to gain added impetus due to the trade frictions between the United States and China.

In the latest update to the US-China tariff, China and the United States have reached a first-phase trade agreement to cut down the tariff, bringing a promising future for open discussion while urging diverse sources for sustainable agricultural product growth.

However, there remains a risk that the surge in demand for Brazilian soy from China, resulting from the ongoing tensions, could increase deforestation and carbon emissions in Brazil.

During Trump’s first presidency, a tariff battle between the two countries led to a sharp drop in US soybean exports to China and a corresponding surge in China’s imports from Brazil over 2018–2019. Trase data shows that deforestation linked to the soy trade between Brazil and China in 2018 was the second highest on record, 42% higher than in 2022.

The destruction of forests contributes to 10–15% of carbon emissions globally. In biodiverse countries such as Brazil, land-use change and deforestation account for almost half of their national emissions.

Strategic opportunity for Brazil-China sustainable trade agreement

The visit by President Lula, Environment Minister Marina Silva and other high-level Brazilian officials to China this week, and subsequent discussions, offer a timely opportunity to reinforce the importance of environmental cooperation alongside growing economic ties.

While Brazil holds primary responsibility for reducing commodity-driven deforestation within its borders, the consequences extend far beyond national boundaries, affecting climate stability, biodiversity and ultimately, global food security for millions of people.

A growing body of research demonstrates that deforestation and climate change pose serious risks to global food security by reducing crop yields, destabilising supply chains and increasing price volatility. These complex and interconnected challenges require coordinated international responses.

Brazil has already committed to ending deforestation by 2030 and has successfully reduced deforestation in the Amazon. Yet, it has struggled to tackle the loss of forests and other vegetation types in the Cerrado biome, where rates of deforestation and conversion for soy are the highest.

A key challenge is the limitation of regulatory measures in the biome, as the law allows farmers to convert as much as 80% of their land for agriculture and other uses. The Brazilian government has acknowledged the urgency of the issue and launched the PPCerrado, a comprehensive action plan to address deforestation and conversion in the biome. Nevertheless, support from key trade partners such as China is essential to scale efforts.

Through joint commitments such as the Glasgow Leaders’ Declaration on Forests and Land Use and the Brazil-China joint statement on climate change, both countries have recognised the issue’s urgency and affirmed their shared ambitions in tackling deforestation.

Moreover, China has positioned itself as a more active player on the global biodiversity and climate agendas. China’s President Xi recently announced that it will soon publish its 2035 nationally determined contributions climate pledge, covering all economic sectors and all greenhouse gases.

As the world’s largest exporter and importer of agricultural commodities, Brazil and China have an opportunity to show increased leadership. This can enable them to work together to implement supply chains that underpin food security and economic development in both countries, while reducing deforestation and environmental damage.

The Tropical Forest Alliance (TFA), through its Taskforce on Green Value Chains for China, is playing a pivotal role in aligning global supply chain actors with China’s sustainability ambitions.

As part of its efforts to decouple soft commodity production from deforestation and conversion, the taskforce recently facilitated a groundbreaking agreement to deliver 1.5 million tonnes of certified sustainable soybeans from Brazil to China.

This landmark deal, involving Chinese commodity trader COFCO International and leading dairy companies Mengniu Group, Modern Dairy and Shengmu Organic Dairy Milk, highlights how private sector stakeholders – supported by TFA – are already advancing the greening of agricultural supply chains.

Clearer signals and stronger support from the Brazilian and Chinese governments, through bilateral sustainable trade agreements and policy guidelines on sustainable sourcing (following the lead of other sectors), could provide the critical momentum needed to scale these efforts.

This article was first published by the World Economic Forum