{"id":95253,"date":"2025-08-05T10:29:50","date_gmt":"2025-08-05T13:29:50","guid":{"rendered":"https:\/\/murray.adv.br\/?p=95253"},"modified":"2025-08-05T10:29:50","modified_gmt":"2025-08-05T13:29:50","slug":"u-s-tariff-hike-hits-10800-mid-sized-exporters-in-brazil","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/u-s-tariff-hike-hits-10800-mid-sized-exporters-in-brazil\/","title":{"rendered":"U.S. tariff hike hits 10,800 mid-sized exporters in Brazil"},"content":{"rendered":"
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Textile and furniture companies without scale face growing risks of layoffs, revenue losses<\/em><\/strong><\/h6>\n<\/div>\n<\/div>\n
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08\/05\/2025<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Of the 74,000 mid-sized companies currently operating in Brazil, around 10,800 (14.6%) export goods and are now exposed to the market upheaval triggered by the U.S. tariff hike, according to estimates from Funda\u00e7\u00e3o Dom Cabral (FDC). Roughly 80% of these exporters are part of the manufacturing sector\u2014one of the segments hardest hit by the measures enacted by Donald Trump.<\/p>\n<\/div>\n

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Professor Paulo Roberto Feldmann of the University of S\u00e3o Paulo\u2019s School of Economics, Business Administration, Accounting and Actuarial Science (FEA-USP) sees three distinct scenarios among the sectors most vulnerable to the tariff shock. In agribusiness export chains\u2014such as coffee, cocoa, meat, and fish\u2014large, efficient groups can redirect shipments to Asia or Europe and, if needed, shift part of their output to the domestic market, helping stabilize prices. However, in sectors like textiles and furniture, which are dominated by mid-sized firms lacking scale or export consortia, the tariffs leave them cornered, with increasing risks of layoffs and revenue losses.<\/p>\n<\/div>\n

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Machinery falls somewhere in between, according to Mr. Feldmann. Manufacturers of agricultural equipment benefit from strong domestic demand and advanced technology, while producers of industrial machinery are losing ground in a shrinking manufacturing base. Mr. Feldmann warns that without cost-cutting, regulatory streamlining, and support for export consortia, the tariff hike could accelerate Brazil\u2019s deindustrialization and deter investment.<\/p>\n<\/div>\n

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FDC professor Eduardo Menicucci modeled the impact of the tariff hike using a real case from Par\u00e1: an a\u00e7a\u00ed producer that earns a third of its revenue from U.S. sales. \u201cThe increase in the final price for American consumers would be 36%, and that can\u2019t be fully passed on by the importer,\u201d he pointed out. \u201cThis creates a very narrow margin for maneuvering, especially with limited domestic demand and no capacity to store the entire output in cold storage.\u201d<\/p>\n<\/div>\n

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Some sectors may be able to build inventory, Mr. Menicucci noted, while others\u2014like furniture\u2014will likely be forced to shut down production lines for the export market. Nearly one-third of Brazil\u2019s furniture and mattress exports and 40% of exports of furniture-related raw materials, inputs, and technology go to U.S. consumers, according to the Brazilian Furniture Industry Association (ABIMOVEL). Some companies are already seeing order cancellations, shipment suspensions, production cuts, and revenue losses tied directly to the Trump administration\u2019s tariff hike.<\/p>\n<\/div>\n

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One example is M\u00f3veis Serraltense, a furniture company based in S\u00e3o Bento do Sul, which granted two weeks of collective leave to its 140 employees in July. In 2024, 80% of the company\u2019s production went to the United States; in the first half of 2025, that figure dropped to just 30%. \u201cFor the next three months, we\u2019re projecting production idle time of 40% to 50%,\u201d says CEO Daniel Lutz.<\/p>\n<\/div>\n

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\u201cWe plan to retain all jobs, perhaps by reducing the workweek by one day without cutting wages, to save on electricity and inputs,\u201d Mr. Lutz added. Serraltense is exploring new markets in Europe and Latin America, but the CEO warns that diversification will take time.<\/p>\n<\/div>\n

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In the furniture hub of Arapongas, Paran\u00e1, leather upholstery manufacturers are also feeling the pressure. At Toro Bianco, a family-run business with 100 employees, scheduled shipments for August were canceled, said director Marcela Carandina.<\/p>\n<\/div>\n

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In Nova Prata, Rio Grande do Sul, nearly all of Artemobili\u2019s production is exported to the U.S. Due to a wave of order cancellations, the company put its 360 employees on paid furloughs. \u201cThis doesn\u2019t just create uncertainty for our company, but for the entire community, where hundreds of families rely on the furniture sector to make a living,\u201d said CEO Gabriel Jo\u00e3o Cherubini.<\/p>\n<\/div>\n

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The Santa Catarina furniture cluster\u2014the country\u2019s largest exporter of furniture\u2014is heavily dependent on U.S. clients. Its 398 companies, located in S\u00e3o Bento do Sul, Campo Alegre, and Rio Negrinho, employ around 7,000 people and generated $123.4 million in exports last year, representing 14% of Brazil\u2019s total furniture exports. The U.S. accounted for 62% of that total ($77.1 million).<\/p>\n<\/div>\n

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\u201cThe new tariffs erode the competitiveness of Brazilian furniture, undermining a bilateral trade relationship that our companies have built through efficiency, innovation, and sustainability,\u201d said Luiz Carlos Pimentel, president of the S\u00e3o Bento do Sul Furniture Industry Association (Sindusmobil). He calls for the continuation and strengthening of bilateral trade negotiations and stresses the urgent need for measures to support Brazil\u2019s export-oriented industries.<\/p>\n<\/div>\n

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The tariff hike comes at a fragile time for mid-sized firms, as highlighted by early findings from FDC\u2019s annual Market Radar study, shared in advance with Valor. Between 2021 and 2024, the number of mid-sized companies entering court-supervised reorganization more than doubled, from 197 to 416. The study, based on data from 10,400 mid-sized companies, shows that these firms saw a 10% drop in net income in 2024 compared to 2022.<\/p>\n<\/div>\n

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\u201cIf the tariffs are not eased, some of these companies will be in very precarious situations, especially those that are already in debt,\u201d Mr. Menicucci said. \u201cFor those that are already putting workers on paid furloughs, the next step will likely be layoffs, and I don\u2019t know of any mid-sized firm with the financial reserves to handle that.\u201d<\/p>\n<\/div>\n

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Structural issues like lack of planning and limited access to capital continue to hamper mid-sized businesses in Brazil\u2019s still-low-internationalization economy. An FDC study conducted in 2023 found that only 11% of mid-sized companies had management maturity levels considered excellent. \u201cThat points to a major gap, but also a huge opportunity,\u201d said professor and researcher Diego Marconatto. He noted that just 13% of Brazil\u2019s mid-sized companies have subsidiaries abroad, even though 85% operate under a B2B model.<\/p>\n<\/div>\n

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The immediate impact of the tariff hike may be minimal for firms without an international presence, but over the medium term, ripple effects will likely hit suppliers to major exporters. \u201cIn footwear, for instance, the supply chain is very dynamic and competition is fierce, which means international competitors can quickly replace Brazilian products,\u201d Mr. Marconatto said. \u201cWe\u2019re likely to see layoffs in that and other sectors.\u201d<\/p>\n

*By\u00a0Dauro Veras\u00a0\u00a0\u2014 Florian\u00f3polis<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Textile and furniture companies without scale face growing risks of layoffs, revenue losses       08\/05\/2025 Of the 74,000 mid-sized companies currently operating in Brazil, around 10,800 (14.6%) export goods and are now exposed to the market upheaval triggered by the U.S. tariff hike, according to estimates from Funda\u00e7\u00e3o Dom Cabral (FDC). Roughly 80% […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26312,26002],"class_list":["post-95253","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-hits-10-800-mid-sized-exporters-in-brazil","tag-u-s-tariff-hike"],"yoast_head":"\nU.S. tariff hike hits 10,800 mid-sized exporters in Brazil - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/u-s-tariff-hike-hits-10800-mid-sized-exporters-in-brazil\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"U.S. tariff hike hits 10,800 mid-sized exporters in Brazil - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Textile and furniture companies without scale face growing risks of layoffs, revenue losses       08\/05\/2025 Of the 74,000 mid-sized companies currently operating in Brazil, around 10,800 (14.6%) export goods and are now exposed to the market upheaval triggered by the U.S. tariff hike, according to estimates from Funda\u00e7\u00e3o Dom Cabral (FDC). 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