Oil, Steel and Aircraft: Trump’s Tariff Hike on Brazil to Impact Exports from Vale do Paraíba and Surrounding Regions

Oil, steel, iron and aircraft—these are some of the key products manufactured in cities across Vale do Paraíba and the Bragança Paulista region that are expected to be affected by the new tariffs announced by U.S. President Donald Trump.

On Wednesday (July 9), Trump unveiled a 50% tariff on all Brazilian exports. The measure is set to take effect on August 1.

In a letter to Brazilian President Luiz Inácio Lula da Silva (PT), Trump justified the move by calling the trial of former president Jair Bolsonaro by Brazil’s Supreme Court an “international disgrace” and claiming that the trade relationship between Brazil and the U.S. is unfair.

The new tariffs are likely to impact exports from cities in Vale significantly, particularly in Paraíba and the Bragança region, with São José dos Campos, Brazil’s second-largest exporter to the U.S., being a notable example.

Other major exporting cities in the region include Ilhabela, São Sebastião, and Pindamonhangaba.

According to Comex Stat, a federal government platform for trade data, Brazil’s top exports to the United States are oil, semi-finished iron and steel products, and aircraft.

Oil—the top exported commodity—is shipped to the U.S. from cities like São Sebastião and Ilhabela. Semi-finished steel and iron products, like those produced in Pindamonhangaba, come next. Aircraft exported by Embraer via São José dos Campos rank third.

Economist Carla Beni, a professor at Fundação Getulio Vargas, noted that even if Trump’s tariff hike is implemented, Brazil has other options, as the goods it exports to the U.S. are also in demand in other global markets.

“What Trump has just done is give a huge boost to BRICS and Mercosur. The products Brazil exports to the U.S. are very desirable—countries all over the world want oil and coffee. These are goods with strong global demand,” said Beni.

“We need to see whether the threat will actually be carried out. If it is, then we’ll face the challenge of finding new markets and adjusting to the new tax burden. But the chance of the tariff holding is low because it would sharply raise prices for American consumers,” she added.

When contacted by g1, Embraer declined to comment on the matter at this time.

President Lula has called a meeting with his cabinet at the Planalto Palace to discuss the tariffs. Vice President Geraldo Alckmin (PSB), who also serves as Minister of Development, Industry, Trade and Services, criticized Trump’s decision as unfair, pointing out that the U.S. runs a trade surplus with Brazil—meaning it sells more to Brazil than it buys.

Despite the criticism, Alckmin said the Brazilian government will maintain a diplomatic stance in its dealings with Washington.

Source: g1

Sharing is caring!