- The US plans to impose 50% tariffs on Brazilian goods from August 1 due to trade and political tensions.
- The most affected industries are aviation, steel, energy, and agri-food, with potentially large losses for exports.
- The Brazilian government is considering support for companies and redirecting exports to other markets, but this requires time and logistical resources.
- Although Brazil’s economy is growing, the risk of inflation is increasing, and the lack of agreement with the US may force further trade diversification.
Customs duties of 50 per cent increasingly likely
Brazil’s finance minister, Fernando Haddad, has admitted that a trade agreement with the United States may not be reached before 1 August – the date from which 50 per cent tariffs on a range of Brazilian exports are due to take effect. Negotiations are still ongoing, but there are growing concerns that they will not produce a result in time.
President Donald Trump’s administration is justifying the planned tariffs with allegations of unequal trade rules and Brazil’s limited cooperation in the context of international investigations into former president Jair Bolsonaro. Authorities in Brazil are preparing for various scenarios, including the redirection of exports to other markets, although, as Haddad stressed, the implementation of such a plan will be time-consuming and require logistics.
Key sectors at risk of loss
Industries such as aerospace, steel, energy and agri-food are the most vulnerable to new tariffs. The US is the most important market for Brazilian oil, steel, coffee, orange juice and aircraft produced by Embraer, one of the leading companies in the aerospace sector. Loss of price competitiveness could hit exports significantly.
The Brazilian government is considering temporary financial support for the companies most affected by possible sanctions, while indicating that it does not plan to significantly increase public spending. President Luiz Inácio Lula da Silva has announced that the country will respond in accordance with the principle of trade reciprocity if the tariffs come into force, but does not intend to take action against US companies with a presence in the Brazilian market.
Possible economic impacts and alternative scenarios
Despite the tensions, the Brazilian economy is still on a stable course, with GDP projected to grow by 2.2% in 2025 and by 1.7% in 2026. At the same time, inflationary risks are increasing, with economists expecting the price index to rise to 5.2% per year.
Faced with the risk of blocking access to the US market, Brazil is stepping up efforts to diversify its foreign trade, seeking closer cooperation with China, the European Union and Southeast Asian countries. Experts do not rule out an extension of the negotiations, but the scenario of a no deal is becoming more and more realistic.
