Tariff Storm: Ukraine And the New Us Trade Policy – More Details

• Reshaping the agricultural market: who will replace the us after the new tariffs?
• How stable is the new us trade policy? 
• How trade duties can change the grain market: prospects for Ukraine 

Trade wars are back

The potential escalation of trade conflicts (may be even wars?) with the US imposing a 25% tariff on imports from Canada, Mexico and the EU and raising tariffs on China to 20% - has already led to mirror measures from these countries. 

In response:  

• Canada imposed a 25% tariff on more than $20B of US goods
• China announced tariffs of 10-15% on US agricultural products. China also intends to impose 100% import tariff on Canadian canola.
• Mexico – in preparations of countermeasures. 
• The EU is also considering imposing tariffs on US agricultural products. 

All these are dramatically changing the global agricultural markets and could create new niches for Ukrainian exports in the 2025/26 season. 

New export chances 

Trade barriers could weaken the US position as a grain exporter. US corn, wheat and sorghum are subject to a 15% tariff in China, and other countries may impose similar restrictions. This increases the demand for Ukrainian grain. 

In particular, Ukraine is a major corn supplier to the EU. A trade war could sharply reduce the share of US corn in the EU, while Ukrainian exporters could increase supplies to offset the decline in imports.

Countries where Ukrainian corn imports may be on the rise

• European Union. The EU has traditionally been one of the largest importers of Ukrainian corn and these imports will increase. Even before the trade conflict escalated, the EU effectively closed its market to US corn with a 25% tariff and GMO requirements. 
• A potential trade war could lead the EU to cut out US corn altogether. If this happens, almost all corn imports into Europe are likely to switch to imports from the Black Sea region. Ukraine is capable to offer the biggest share of needed corn, together with Brazil and possibly Argentina. 
• China. China previously increased corn imports from Ukraine. The 2018-2019 trade war showed this trend: China's retaliatory tariffs increased corn imports from Ukraine by 20%. With the 15% tariff, US corn and wheat are effectively out of the game. 
• In 2024, China sharply reduced US corn imports due to competition from alternative suppliers. Even if US corn imports are stopped, China's total corn imports will likely to drop 23 M mt in 2023/24 to 10-12 M mt in 2025/26.
• Mexico. The Mexican corn imports are strategically important for US agriculture.  Now, Mexico's dependence on the US is almost complete - out of total corn imports in 2024, the US share is over 90%. 

The tariffs force Mexico to look for other sources of feed grain to avoid a domestic price spike. The Mexican import tariffs for alternative suppliers are likely to be reduced, at least temporarily. Although a complete replacement of the US is unrealistic in the short term, even a partial change of suppliers opens up opportunities for Ukrainian corn exports. 

In 2024, Mexico's imports of US corn alone amounted to $5.6 B. Alternative suppliers such as Brazil, Argentina and Ukraine will potentially share this piece of the pie. Brazil will benefit the most, given its lower freight costs to Mexico compared to Ukraine.

Previously Ukrainian shipments to Mexico were negligible. However, Ukraine could supply up to 1-2 M mt of corn to Mexico in the 2025/26 season. The key advantage is that Ukraine produces mostly non-GM corn, while Mexico restrictions cover GM corn for food usage.

Other lower probability potential markets that could increase Ukrainian corn imports under the influence of potential tariff wars

South Korea. The S. Korea is very price sensitive and actively diversifies its feed suppliers. S. Korea imports around 10 M mt of corn annually from traditionally cheapest originations. If the tariffs are in force, US corn price may increase giving a chance to Ukraine to return to the list of suppliers. In 2019-2020, South Korea has already imported some batches of Ukrainian corn at competitive prices. 

In this scenario, 1.5-2 M mt of Ukrainian corn is forecast to be supplied to South Korea in 2025/26 (about 15-20% of total imports). Brazil and Argentina are other suppliers, traditionally strong in Asian markets. In addition to corn, S. Korea may increase imports of feed wheat and barley from Ukraine, especially if these commodities are subject to tariffs from the US. 

In general, the tariff war may help Ukraine to regain and strengthen its position in the Korean market, which was previously limited by logistical factors.

Japan. Japan is one of the world's largest corn importers (~15 M mt per year) mainly from the US. If the tariffs are in force, US corn price will rise by at least 25%. For Japanese importers, this is a signal to shift their purchases. Ukraine, of course, has a chance to enter this traditionally "closed" market if it meets the quality standards.

Ukraine's competition with Brazil and Argentina: seasonality and prices.

If the US loses a significant share, competition for Ukraine's corn will intensify with Brazil and Argentina. In recent years, Brazil competed with the United States for the top spot as a corn exporter, and Argentina is stable in the top three. 

At present, UkrAgroConsult's scenario is based on the assumption of the growth of Ukraine corn harvest in 2025. Corn area expectations are around 4.2M ha (+4% y/y), which is confirmed by the Ministry of Agrarian Policy forecasts (4.15 M ha) and information from seed distributors/suppliers. Under favourable weather, 2025 corn harvest may be at 30-31 M mt (+17% y/y), of which 25 M mt can be exported (+20%) in 2025/26. 

However, the supply seasonality is a crucial factor in the distribution of markets among exporters:

Autumn - early winter (October-December, Q4 2025): As Ukrainian and US harvesting is over, corn exports from these countries tend to peak. 

If the US exports are restricted by tariffs, Ukrainian corn will face less competition at the start of the season. In Q4, Ukraine could aggressively increase exports to Europe and Asia, occupying the place previously packed with new-crop US corn. 

In Q4, Brazil is completing the export of its safrinha, the second corn crop (harvested in June-July). Significant Brazilian exports will already be sold in the summer, but some stocks still be available in the autumn. However, most of the Brazilian sales to China and Asia will take place before October, leaving Ukraine in a relatively definite position to supply Asia at the end of the year, competing mainly with Argentine stocks.

Winter - early spring (January-March, Q1 2026). US stocks typically cover global demand until the new southern hemisphere corn crop arrives. Tariffs could lead to a build-up of US domestic stocks, creating a global shortage of duty-free corn supply. This could push up world prices, at least for buyers avoiding the US. 

Ukraine could also benefit if autumn stocks are sufficient, corn will be exported at higher prices in January-March 2026. 

Spring-early summer (April-June, Q2 2026). Argentine corn traditionally arrives in Asia and Europe in late March or April. If Argentina corn harvest is large in 2025/26, Armenian corn will compete aggressively for the same customers as Ukraine, especially in April-June. Ukraine should therefore maximize its exports before the arrival of South American shipments.

Summer (June-August, Q3 2026) will be dominated by Brazilian corn exports as the main second corn crop is harvested.  Brazilian corn will be shipped to Mexico, China, South Korea and the EU. 

By August 2026, Ukraine will end the 2025/26 season with minimal corn carryover stocks. Corn competitiveness in the summer will be limited, but this is less critical as most of the grain will be exported earlier. At the same time, global prices could fall slightly in the summer under pressure from Brazilian supplies. 

Impact on world prices 

Overall, the US withdrawal from some markets will impacted prices significantly. Comparatively big spread between US domestic and global prices is quite predictable. Domestic values are likely to fall due to oversupply (soybean futures have already dropped to annual lows following the tariff announcement), while global prices for other origins may rise in the medium term due to increased demand. 

At the same time, EU grain prices may remain high as trade barriers historically support domestic prices in the importing countries. Ukrainian exporters will benefit from this gap: they will sell at the benchmark world price (supported by demand) without having to compete with dumped US domestic grain prices. 

However, competition from Brazil and Argentina will keep prices from rising too much. If South America will harvest bumper crop as forecast (February-early March better weather "significantly improved" Argentina's crop conditions), the extra supply will partly offset the US decline. This means that world corn prices could rise moderately. 

As for wheat, the world price is more dependent on the Black Sea and Australian harvests in 2025. Decreased US wheat exports will not dramatically affect the global wheat market, but may increase milling wheat price in Mexico and Japan until alternatives are found. 

Therefore, by 2025/26, Ukraine and South American countries may effectively be sharing the so-called "pie" that used to belong to the US. Competition will be fierce, but demand will be high enough for all major exporters to increase export figures and profits.