About 3,000 products face additional levies of up to 37.5% as bilateral flows have already fallen 13% this year
New U.S. tariffs will leave Brazil facing some of the toughest restrictions on access to the American market, affecting about 3,000 products and more than $11 billion in industrial and agricultural exports, said the American Chamber of Commerce in Brazil, known as Amcham Brasil.
The U.S. surcharge on Brazilian exports could now reach 37.5%, the chamber estimates.
Amcham also warned that the tariff increase could deepen the contraction in bilateral trade, which has already fallen 13% this year, while weighing on investment flows between the two countries.
The new 25% tariff takes effect next Wednesday (22), and stems from an investigation conducted under Section 301 of the U.S. Trade Act. The provision allows Washington to impose sanctions on countries it considers to be acting against U.S. interests.
In Brazil’s case, the U.S. government claims that Pix, the country’s instant-payment system, harms American payment companies and that Brazilian authorities tolerate corruption. Washington has also criticized Supreme Court rulings involving U.S. technology companies.
Sector impact
Economists and foreign-trade specialists do not expect the latest tariffs to have a significant impact on Brazil’s economy as a whole. The consequences for individual industries, however, could be substantial, forcing companies to adapt and diversify their markets.
Experts have also urged the Brazilian government to respond cautiously because of the dispute’s political dimensions.
Manufacturers, whose exports to the U.S. were already declining sharply, are bracing for an even more difficult environment. Concern is particularly acute among industries whose products had previously been exempt but will now face tariffs, including dissolving pulp.
Paper, wood panels, medium-density fiberboard, particleboard and laminate flooring will also be affected.
Several major industries escaped the new levies, largely after their U.S. customers persuaded the administration that tariffs would be damaging. Exemptions were granted for pig iron and agricultural products including coffee, orange juice, beef, honey and seafood.
The U.S. government’s decision reflects the importance of those Brazilian goods to domestic supplies. Tariffs could have increased costs and added to inflationary pressure for American consumers.
Government response
Vice President Geraldo Alckmin said Brazil would invoke its Reciprocity Law “at the appropriate time” and provide support to the affected industries.
During the Section 301 investigation, the U.S. government sought the complete opening of Brazil’s chemicals market, Industry, Trade and Services Minister Márcio Elias Rosa said. Washington also requested the elimination of tariffs on industrial goods and access to Brazil’s automotive market.
The U.S. additionally sought an agreement restricting investments in critical minerals and rare earths by “non-market-oriented actors” and “foreign entities.”
“We obviously and clearly rejected any demand that could put at risk or violate the national interest, as is the case with Pix, or that could cause serious damage or losses to Brazilian industry,” Elias Rosa said.
The Brazilian government presented its “negotiable and non-negotiable” positions at every meeting with U.S. officials, the minister added.
Alckmin and Elias Rosa spoke at a press conference also attended by Foreign Minister Mauro Vieira, Finance Minister Dario Durigan, Environment Minister João Paulo Capobianco, Central Bank Chair Gabriel Galipolo and National Justice Secretary Maria Rosa Loula.
Diplomatic clash
Vieira pushed back against remarks by U.S. Secretary of State Marco Rubio targeting President Luiz Inácio Lula da Silva.
Rubio blamed the tariffs on the Brazilian government’s conduct toward the United States. In a post on X, he said Lula had “put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that.”
Vieira said Rubio had attacked “the head of state of a friendly country in a crude and arrogant manner.”
He argued that what troubled the U.S. government was Brazil’s refusal “to bow” to “excessive ambitions and unreasonable demands” during the Section 301 investigation.
By publicly endorsing President Donald Trump’s decision, Rubio signaled that the White House intends to pursue a maximum-pressure strategy. The aim is to force the Brazilian government to make concessions on fiscal, environmental, digital and intellectual-property issues before the U.S. market is reopened more broadly to Brazilian exports.
Election politics
The U.S. decision has also become ammunition for Brazil’s leading presidential hopefuls.
President Lula’s Workers’ Party stepped up its attacks on Senator Flávio Bolsonaro of Rio de Janeiro, the Liberal Party’s likely presidential candidate. Party members used the term “TariFlávio” on social media in an effort to associate the new tariffs with the Bolsonaro family.
Flávio Bolsonaro, meanwhile, sought to portray the announcement as the result of inaction by the Brazilian government. He called Lula the “Brazilian Biden,” referring to former U.S. President Joe Biden.
Other prospective candidates, including Romeu Zema of the New Party, Ronaldo Caiado of the Social Democratic Party and Renan Santos of the Mission Party, sought to blame both Lula and Flávio Bolsonaro for the dispute.
*By Valor — Brasília, São Paulo, Rio de Janeiro
Source: Valor International
https://valorinternational.globo.com/