The European Union's counter-tariffs against U.S. products, which will be implemented next week, are expected to stop a large amount of U.S. grain from reaching Europe and increase costs for buyers who want to find alternative sources of feed grain.

The grain market has reacted with restraint so far, as traders are unsure whether a barrage tariffs including tit for tat U.S.-China duties will remain in place or be lifted following negotiations.

In response to the U.S. tariffs on steel and aluminum, the EU will impose 25% duties on corn (maize), starting April 15. The EU will impose tariffs on U.S. soya beans, which it imports in larger volumes than corn.

In Europe, corn is primarily used to feed livestock such as cattle, pigs and poultry.

The EU approved retaliatory actions on Wednesday that will drive U.S. Corn off European markets, where European buyers have been grabbing up cheap and abundant U.S. supplies during this season.

The EU imported US corn between July 1, 2024 and April 6, 2025. This is up from 114,000 tons just a year ago. The EU's second largest supplier is Ukraine.

EU importers can still find supplies in Ukraine or Brazil. Prices are higher in Brazil than the United States, but could increase further before Brazil's new crop begins in July.

"I don't think that corn tariffs are a problem of supply, but rather a matter of cost." One European trader stated that there are other supplies available in South America and the Black Sea, but they would cost at least $6 to $7 per ton more.

The European Feed Industry Association FEFAC warned that tariffs could cost the EU 2 billion Euros in additional costs. Instead, the EU should use its import requirements to increase trade with the U.S.

Spain is leading EU imports of U.S. Corn this season. This includes a recent purchase of 240.000 tons, announced by the U.S. Government on Tuesday.

Stephane Radet (Director General of French Feed Industry Association SNIA) expressed his relief at the fact that certain feed products, such as soymeal, have been excluded from the EU tariff list.

He said that the industry is worried about the inclusion of the feed additive lysine, and the separate EU anti-dumping duties on Chinese lysine, which could lead to a rise in prices.

The proposed EU duty for U.S. soya beans is a potentially bigger issue as the U.S. has been the EU's biggest supplier with over 5 million tonnes annually.

The traders see the delay of the December 1st date for the duty on soybeans as a way to allow time for trade negotiations and to let EU importers keep buying U.S. bean while No. China, the world's largest importer of soybeans, is focusing on Brazilian supplies. Reporting by Sybille De La Hamaide in Paris and Guilty Trompiz, Michael Hogan and Emma Pinedo respectively in Hamburg and Madrid. Editing by Rod Nickel

(source: Reuters)