Looking to other Asian markets beyond China could offer opportunities for some sectors
08/01/2025
Opening new markets to redirect Brazilian products affected by the 50% U.S. tariff is a slow and challenging process that won’t bear fruit in the short term, warn international trade experts. Some sectors may eventually find opportunities in Asian countries outside of China, currently the largest buyer of Brazilian goods.
The process of opening new markets can take months or even years, experts explain. Bureaucratic hurdles, including sanitary licenses and regulatory approvals, must be overcome, and companies still need time to establish business contracts in these new destinations. This is all unfolding amid global turbulence, with the U.S. tariffs affecting several countries at once and spurring everyone to seek alternative markets.
Estimates on how much of Brazil’s export portfolio is subject to the new tariff vary. According to the Ministry of Development, Industry, Trade and Services (Mdic), the measure could affect 35.9% of Brazil’s exports to the U.S. In 2024, those exports totaled $40.3 billion, meaning around $14.5 billion are at risk due to the tariff imposed by President Donald Trump’s administration.
Welber Barral, former foreign trade secretary and partner at BMJ Consultoria, divides the affected products into three groups. The first includes food commodities like coffee and meat. Due to their characteristics, these have a better chance of being redirected to other global markets or even within the U.S. itself—but at the cost of lower prices, as the tariff effectively reduces American and global demand while supply remains unchanged.
The second group includes industrial products, particularly machinery. For these, the natural destination is Latin America, especially South America.
“China, Indonesia, and India are large markets, but they don’t have the same purchasing power as the U.S. Also, they’re more likely to buy commodities, since Brazil can’t compete in industrial products in those markets—except for niche items,” says Mr. Barral.
The third group consists of Brazilian subsidiaries of American companies. Their outlook is the worst, in Mr. Barral’s view. “Most likely, parent companies will seek factories in countries with lower tariffs to produce. Any investment plans in Brazil are now in limbo because companies no longer know to what extent they’ll be able to export to their own headquarters.”
Global demand conditions and supply in other regions also affect the search for new buyers, notes José Alfredo Graça Lima, vice president of the board at the Brazilian Center for International Relations (Cebri).
Coffee, for example, is largely exported to the U.S., but demand elsewhere in the world is already saturated, he says. “If we can’t find a market to replace the U.S., prices will be affected,” he warns.
Lia Valls, head of economic analysis at UERJ and associate researcher at FGV Ibre, emphasizes that entering new markets requires meeting specific quality standards, which can be a lengthy process.
“These adaptations are not impossible, but they won’t happen right away and won’t be feasible for every product,” she says. “Each market has its own quality certifications—Europe, for example, has very strict rules depending on the product.”
Machines and shoes face particular challenges, says Ms. Valls. “Some machines are custom-built for individual companies, and shoes are made to specific sizes. These products will require more significant adjustments to be suitable for new markets.”
Given the situation, expanding the list of exemptions to the U.S. tariff may be the best-case scenario, says José Augusto de Castro, CEO of the Brazilian Foreign Trade Association (AEB). “Personally, I think that list will expand. For some products, it simply doesn’t make sense to be excluded,” he says, citing coffee as an example—since it isn’t produced in the U.S.
In the short term, betting on countries that already buy from Brazil may be the safest move, says Mirella Hirakawa, head of research at Buysidebrazil. “The question is whether there will be demand to absorb this surplus.”
In the case of beef, 10.3% of Brazilian exports in the first half of 2025 were destined for the U.S. Some of that volume could be redirected to China, which accounted for 51.6% of Brazil’s beef exports.
Other products could follow the same path, says Ms. Hirakawa, including coffee—the European Union buys around 33.8% of Brazil’s coffee exports, compared to 16% by the U.S.—and ethanol. In that case, China and South Korea each import more than double what the U.S. buys (11.8%).
Carlos Frederico Coelho, researcher at the BRICS Policy Center and professor of international trade at PUC-Rio’s Institute of International Relations, believes Brazil can look to other Asian countries beyond China.
“It’s hard not to consider Asia. The continent may be the next frontier for protein exports. The challenge is, how much more can Brazil sell, given that we already export to the region? It will mean going beyond China,” he says.
In the case of coffee, global demand could help redirect exports over the medium to long term, Mr. Coelho explains. “The Brazilian coffee that won’t go to the U.S. will be replaced there by other suppliers. That opens up space elsewhere for Brazilian exports.”
Brazilian footwear, which was also hit by the 50% U.S. export surcharge, can’t easily be redirected to new markets due to its highly customized production, says Haroldo Ferreira, CEO of the Brazilian Footwear Industry Association (Abicalçados).
“I can’t take that shoe and ship it to Chile or Europe, for example. It was developed for a specific importer,” he explains.
According to Mr. Ferreira, 22% of Brazilian footwear exports go to the U.S. “Last year, we exported $216 million—10.3 million pairs. In the first half of 2025, we exported 5.8 million pairs, up 13.5%. In other markets, growth was 8.8% over the same period.”
For the textile sector, redirection is also costly due to the need for international infrastructure, such as distribution centers, sales networks, and local contacts, says Fernando Valente Pimentel, executive director of the Brazilian Textile and Apparel Industry Association (Abit).
“It’s not a matter of just switching markets. You can’t find new destinations right away,” he says. “The viable option is the local market, which has its own specific demand.”
Mr. Pimentel says the U.S. is one of the top three destinations for the industry’s exports. “We expected to sell around R$500 million this year, half of which had already been fulfilled in the first half,” he notes. “But with the new tariff, almost everything is jeopardized.”
In the search for new alternatives, Mr. Pimentel says the conclusion of the EU-Mercosur agreement is currently the sector’s top priority. “The deal could open new space for trade, investment, acquisitions, and operational and technological partnerships,” he says.
*By Marcelo Osakabe, Alex Jorge Braga and Michel Esquer — São Paulo
Source: Valor International
https://valorinternational.globo.com/