(Bloomberg) -- China’s threats of tariffs against imports of U.S. soybeans may end up being a costly move for the Asian country if the trade spat heats up.

That’s according to a report Thursday from Sam Funk, an analyst at Rabobank, who said that duties against U.S. shipments may mean that China ends up buying supplies from South America at a premium. Brazil is the world’s biggest soy exporter, followed by the U.S.

Soybeans are among products caught in the tit-for-tat trade tiff between the U.S. and China, the biggest consumer of the crop. The Trump administration plans to announce a final list of tariff targets on Friday for Chinese products. Soybean growers, traders, handlers and investors are waiting to see whether China subsequently follows through on plans for retaliatory duties on U.S. shipments of the oilseed.

Prices for South American supplies are already on the rise thanks to increased Chinese buying, a drought in Argentina and a recent truckers’ strike in Brazil.

“If trade negotiations and potential policies continue to distort Chinese imports of U.S. soybeans, other countries will benefit from lower U.S. soybean prices,” Funk said. “China will also have to pay continued premiums for South American soybeans.”

Dependence on South American supplies may also limit China’s ability to buy throughout the year, Funk said. Soybean importers often turn to the U.S. for shipments after the Northern Hemisphere harvest around September and then gradually shift purchases to South America around February.

--With assistance from Tatiana Freitas.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net, Millie Munshi, Patrick McKiernan

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