Like Taurus, other large Brazilian companies with exports to the U.S. or production in North America spent the second half of 2025 trying to find ways around the impact of Washington’s tariff offensive.

Now that fourth-quarter and full-year 2025 earnings season has passed, manufacturers such as Tupy, Iochpe-Maxion, WEG and Taurus itself are calculating the damage U.S. tariffs inflicted on their results.

“Our war is over,” Taurus Chief Executive Salesio Nuhs said on the company’s fourth-quarter earnings call, referring to the end of the 50% tariff that had been applied to shipments to the U.S.

Firearms were not included on the list of products exempted from the 40% surcharge announced by U.S. President Donald Trump in July last year, which was added to the initial 10% “reciprocal” tariff.

Indirect damage

Brazilian multinational Iochpe-Maxion, which operates in 14 countries producing vehicle wheels and components for the transport industry, faced a R$700 million hit to revenue because of the tariff shock. Since it has four plants in Mexico and the U.S., the company did not suffer direct effects from the tariffs, as products made in Mexico are exempt when shipped to the U.S. market under regional trade agreements.

But its production was hurt by a drop in sales volumes of steel wheels and chassis for heavy trucks. The impact was indirect: as tariffs reduced U.S. imports, freight volumes and freight prices fell, weakening transport operators’ appetite to renew fleets.

“The drop in volumes was much more related to weaker end demand than to a direct effect from tariffs,” Renato Salum, Iochpe-Maxion’s finance and investor relations director, told Valor. “The decline in truck production in North America last year was more an indirect than a direct consequence of the tariffs. The end buyer does not immediately feel the inflationary impact on prices, which increases uncertainty and leads to postponed purchase decisions, affecting demand throughout the chain, including in Mexico,” Salum said.

In financial terms, Iochpe-Maxion saw “a reduction of roughly R$700 million in revenue, equivalent to about 35% of revenue in North American structural components,” he said.

Based on conversations with clients and analysis from specialized consultancies, the company expects demand to normalize in the second half of 2026.

“That view is supported by rising orders for heavy-duty vehicles since late 2025, a trend that strengthened at the start of this year.”

Rising prices

For Taurus, a new 10% tariff announced by Trump on the same day as the court ruling, under a different legal provision in U.S. trade law, was largely offset by the 7% price increase the company imposed on its products in the U.S. at the start of the tariff shock, according to Nuhs.

To reduce the impact, the company also activated assembly lines at its Taurus USA subsidiary in Georgia, shifting to exports of parts, which carry lower value than fully assembled products. All pistols in the G family are now made at the U.S. unit.

“In addition, we took radical measures on productivity, whether through headcount reduction or changes in our production processes,” Nuhs told Valor. Even so, Taurus estimates it paid $18 million in tariffs in 2025 and early this year.

The company hired two law firms in the U.S. to seek reimbursement of those tariffs and recently decided to continue with only one.

Mixed picture

Foundry group Tupy cited the tariff shock as one of the factors pressuring sales of structural components such as engine blocks and cylinder heads in its fourth-quarter performance. Net revenue from that segment fell 5.1% year on year, to R$1.31 billion in the period.

For this year, Tupy’s management said on the earnings call that it sees positive signs in the external environment, with reduced tariff-related uncertainty translating into higher orders from automakers, which should lift Tupy’s production from the second half onward. The company declined to comment.

In a report, analysts at Banco Safra said the removal of the 50% tariff should improve the electrical equipment manufacturer WEG’s competitiveness, allowing it to resume direct exports from Brazil to the U.S. rather than relying on Mexico as an intermediary.

In an interview with Valor in October last year, Chief Financial Officer André Rodrigues said the company’s Mexican unit was almost entirely dedicated to the U.S. market.

On the fourth-quarter earnings call, after the tariffs were struck down, Rodrigues said it was still too early to draw a new scenario and noted that the 50% tariff on imports of steel, aluminum and several related products remains in force under Section 232 of the Trade Expansion Act.