Machinery and Equipment Manufacturers Expect to Maintain Exports to the U.S.

Brazilian machinery and equipment manufacturers expect to maintain export volumes to the United States in 2025 despite the new tariff policy that imposed a 10% surcharge on U.S. imports. The U.S. is the main international market for Brazilian machinery and equipment, especially for the “yellow line” segment, which includes heavy machinery used in construction, logistics, and infrastructure. In 2024, Brazil exported USD 13.2 billion in machinery and equipment, with 26.9% destined for the U.S.

“This level of U.S. participation in Brazil’s exports is historic. It has remained relatively stable since the 2000s,” says Cristina Zanella, Director of Competitiveness, Economics, and Statistics at the Brazilian Association of the Machinery and Equipment Industry (Abimaq).

The yellow line segment accounted for nearly half (USD 1.8 billion) of Brazil’s machinery exports to the U.S. in 2024. This includes loaders, graders, excavators, asphalt pavers, compactors, and off-road heavy trucks used in construction and mining.

However, the U.S. is far more important to Brazil than vice versa in this sector, as Brazil represents just over 1% of total U.S. machinery imports. Mexico is the leading supplier, accounting for around 20% of U.S. imports, followed by China (nearly 15%) and Germany (12%).

According to Zanella, it is still too early to gauge the full impact of the new tariff policy enacted by the Trump administration. Brazilian machinery, which already faced an average 10.2% duty, is now subject to an additional 10% surcharge. “What we can say is that Mexico, which was not hit by the new tariffs, will enjoy a competitive advantage,” says Zanella. However, other major suppliers were impacted equally.

She notes that the U.S. has significant know-how in machinery production and may increase local manufacturing in the medium term. “It’s up to companies to assess whether domestic production will be more competitive than importing at higher costs,” she says. “In many cases, they won’t be competitive. The cost of manufacturing in the U.S. is high,” Zanella adds.

The Brazilian unit of Volvo Construction Equipment exports 80% of its production of articulated trucks to the U.S. These off-road heavy-duty vehicles transport materials across rough terrain, mainly in heavy construction, infrastructure, and mining. Their capacities range from 20 to 60 tons.

In 2024, 1,100 units were sold to the U.S. market, generating USD 300 million in revenue. “Our expectation is to maintain the same export levels in 2025, even with the new tariffs,” says Luiz Marcelo Daniel, President of Volvo CE Latin America. In 2024, the U.S. consumed around 4,200 of these machines.

According to Daniel, no vertically integrated manufacturers of this equipment in the U.S. could benefit from protectionist measures. Those who produce locally rely heavily on imported parts and components and will also be affected by the tariffs.

Volvo CE has a plant in Pennsylvania that manufactures compactors and loaders but has no plans to produce articulated trucks there. “In Brazil, we have an efficient and competitive supply chain that would be difficult to replicate elsewhere,” Daniel explains. In Volvo’s global strategy, only Brazil and Sweden produce articulated trucks, using similar platforms that offer comparable technological maturity. “The new tariffs do not change Volvo’s global production strategy,” he states.

The Brazilian unit of Case Construction Equipment, part of the multinational group CNH, exports six crawler dozer models with capacities ranging from 6 to 22 tons to the U.S. These machines are produced in Contagem, in the metropolitan area of Belo Horizonte, which is the company’s global hub for dozer production. “Exports to the U.S. represent a significant share of revenue for this product line,” says Henrique Sá, head of Case for Latin America. The company does not disclose financial figures.

According to Sá, the new tariffs have not yet significantly impacted sales performance in the U.S. market, and the forecast is to maintain export volumes in 2025. “The company does not plan to change its export operations from Brazil to the United States,” he affirms.

Still, according to Sá, the Brazilian unit hopes to increase the presence of its yellow line equipment in the U.S. market. In Contagem, the company also manufactures backhoe loaders, hydraulic excavators, wheel loaders, and motor graders.

Source: Valor Econômico

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