US tariff hike threatens 36% of Brazilian exports

The Brazilian government is assessing the impact of the tariff hike announced by the United States, which could affect 35,9% of national exports. The estimate was made by Vice President and Minister of Development, Industry, Trade, and Services Geraldo Alckmin, considering the list of approximately 700 products that were excluded from the 50% surcharge on shipments to the United States.

Alckmin stated that the government is preparing an action plan to minimize the impact on the most affected sectors and, most importantly, preserve jobs. "We will focus on the 35% of exports that were affected and support the hardest-hit sectors to protect production and jobs," he said.

The tariff hike was announced in a letter sent to the Brazilian government on July 9 by US President Donald Trump, predicting the start of the tax on August 1. This Wednesday (30), however, Washington extended the start date to August 6 and released a list of exceptions to avoid negative impacts on the economy itself.

Products exempt from the surcharge include orange juice and pulp, fuels, minerals, fertilizers, wood pulp, cellulose, precious metals, energy products, and civil aircraft, including engines and components. Coffee, meat, and various fruits, on the other hand, will be taxed at 50%.

Alckmin explained that the impacts vary depending on each sector's export profile. "A segment that exports only 10% of its production suffers less. But there are sectors that export half of their production abroad, and 70% of that goes to the United States. These are the most vulnerable," he explained.

Reaction plan

According to the vice president, the government's plan is "practically ready" and should include financial, tax, and credit measures for affected companies. The proposal still needs to be approved by President Luiz Inácio Lula da Silva.

The package includes three fronts: attempting to reduce the percentage of affected exports through new negotiations with the US, seeking alternative markets, and offering direct support to the hardest-hit sectors, such as fish, honey, and fruit. "We will try to include more products in the list of exceptions, such as other fruits and beef," Alckmin said.

New markets and agreements

To reduce dependence on the North American market, the government intends to accelerate the opening of new destinations for Brazilian products. According to Alckmin, the country has already gained 398 new international markets and is banking on the trade agreement between Mercosur and the European Union coming into effect this year.

"These are 27 of the world's richest countries, plus four others—Norway, Switzerland, Iceland, and Liechtenstein—that also have high purchasing power. These agreements will strengthen Brazilian foreign trade," he stated.

The vice president reinforced that the country will continue to work to ensure competitiveness and legal security for exports. "Brazil represents only 2% of global GDP. This means that 98% of trade takes place abroad, and we need to seize these opportunities," he said.