Brazilian producers exporting to the US may find relief from Trump’s 50% tariff with the help of US entrepreneurs. Fearing the immediate increase in the prices of Brazilian inputs, they tend to negotiate quotas and exceptions with Washington, which can benefit Brazilian production.
According to Oliver Stuenkel, professor at the Getulio Vargas Foundation’s International Relations School, the mobilization of the US private sector will be fundamental. He points out that Brazilian diplomacy should help coordinate this movement in search of alternatives to fare.
With the new rates, it is projected high in prices in various activities-such as construction, manufacturing, food and beverage. There is already expectation of mobilization by entrepreneurs and state governments of Florida, Georgia, Michigan, Ohio and Texas.
The quotas sectoral negotiation strategy or exceptions by Americans becomes even more relevant in the face of possible retaliation of the government of Luiz Inacio Lula da Silva (PT) and the estimate that Brazilian producers can have losses up to $ 23 billion by 2026.
Some segments are already organizing around this strategy. Coffee -producing associations, for example, sought their similar American to reach a negotiated solution.
“The great hope is that buyers [americanos] They can do this work for Brazil, ”says the professor. For him, US importers may have more weight in negotiations, especially considering Trump’s speech centered on“ defense of American interests ”.
Negotiation channels between Brazil and the United States are obstructed
Stuenkel notes that there are few official channels of direct negotiation between the governments of Brazil and the United States. Trump himself said over the weekend that he may call President Lula – “but not now.”
“Brazil does not have a super operation in Washington that can be triggered in the short term. There are no American senators who are friends from Brazil and can call Trump and negotiate. Israel has it, Mexico has it, but Brazil does not have,” says the teacher.
Meanwhile, the Brazilian government has already signaled that it intends to use the Economic Reciprocity Law, which provides for counteles on fares such as those imposed by Trump. However, this answer can turn against Brazil itself and be shot by the Culatra.
Brazil is a secondary commercial partner for the USA
As Brazil is only the 15th largest US commercial partner, the announcement of tariffs – made on Lula’s letter – had no significant repercussion in the American market. The theme has not gained space in public debate, nor did it generate pressure on the White House, which reduces the perspective of direct negotiation by the Brazilian government.
According to William Castro Alves, chief strategist of the Avenue international investment platform, the explanation is simple: “The importance of Brazil for the United States is very reduced.“ This is the truth. The impact on the American economy is very low, ”he says. Even with price increase in some sectors, a relevant inflationary effect in the US is not expected.
Brazilian associations are negotiating directly with partners in the USA
Given this scenario, some national sectors are organizing to find a solution to the tariffs imposed by the US. The Board of Coffee Exporters in Brazil (Cecafe) and the National Coffee Association (NCA)-an American entity that represents roastors, retailers, suppliers and large companies-study an alternative solution for the sector.
The purpose of the negotiation is to include coffee in a list of exceptions to tariffs, with the argument that the product is not produced in the United States, a country that is the world’s largest buyer.
In Brazil, coffee leads agribusiness exports to the US. In the first half of this year, sales totaled US $ 1.2 billion – equivalent to one sixth from all foreign trade in the sector with the country.
Stuenkel draws attention to a mistaken vision: that the only way out would be to completely reverse the tariffs. According to him, the American industry tends to negotiate specific exemptions, not a broad revocation. “There are a thousand ways to offer exceptions, quotas. It is often thought that either fares are valid for everyone, or they are nullified for everyone – and that’s not how it works,” he says.
There are even sectors of the American economy that can support the maintenance of tariffs for protectionist reasons. This includes those beneficiaries in Section 232, which authorizes US President to impose restrictions on importing strategic products on national security, such as semiconductors, critical minerals and pharmaceutical inputs.
Affected states tend to pressure Trump government for exceptions
Still, the effects concentrated on certain sectors or regions of the US can play in favor of Brazil in the discussions about Trump’s tariff. Stuenkel explains that the more geographically located the impact, the greater the chance of political pressure.
“If there is a problem that affects three million people in a state, the governor will take this to the White House. But if these people are spread across the country, there may be no political impact.”
The American construction industry must be one of the hardest hit. Inputs such as cement, steel, wood, ornamental stones, screws and finishing materials will have an immediate increase in costs. Florida and Georgia companies, for example, can see cement prices shoot, which would affect public and private works.
According to XP Investimentos report, the new 50% rate will be applied to existing rates. In the case of steel and aluminum, which are already taxed by 50%, the total can reach 100%. Still, Brazilian companies with US operations can mitigate some of the effects and even redirect their production strategy.
Trump’s tariff can make American companies review shopping
The automotive industry can be affected, although it does not buy ready -made parts from Brazil. The high of imported steel presses the costs of automakers.
In the aerospace sector, companies such as American Airlines, which operate Embraer aircraft, can postpone or cancel acquisitions for fleet renewal. The new fare can reduce Embraer’s operating profit by up to $ 220 million – equivalent to 35% of the projection to 2025.
In the food sector, the high price would affect items such as coffee, orange juice and canned meat. According to Stuenkel, the beverage and processed food industries have little margin to absorb increases.
TD Cowen’s Andrew Charles report estimates that Starbucks profit could fall 1.4% with the high of coffee – a product in which Brazil leads exports to the US, with 22% of the total in 2024. However, William Castro Alves recalls that commodities such as coffee can be easily replaced by Colombia, Ethiopia or Indonesia products.
Brazilian response to Trump’s tariff will be fundamental to the outcome
Despite the efforts of the American industry, the real effect of tariffs also depends on the Brazilian response. William Castro recalls that, so far, countries that have adopted tariff retaliation only “climbed” the dispute without being able to reverse it effectively. “It was clear that looking for reciprocity or either by targeting the US was not an intelligent strategy for those who tried it,” he says.
The Brazilian government intends to regulate this week the Law of Economic Reciprocity. According to Vice President Geraldo Alckmin, the measure will be published until Tuesday (15). A committee with government and private sector members will also be created to evaluate the next steps. Depending on Brazilian posture, American efforts for mitigations can be reinforced – or frustrated.
