Brazilian exporters press government for concrete action against U.S. tariffs

With the United States’ 50% tariffs on Brazilian products taking effect, pressure from the private sector on the federal government for solutions to circumvent the crisis has increased. Business leaders and executives from various agribusiness sectors affected by the U.S. measures are already voicing, behind the scenes, their dissatisfaction with the government’s handling of talks with the White House and the lack of concrete results—both in reversing the tariff hike and in presenting relief measures for exporters.

An executive from the export sector with connections in Brasília stated that the government’s actions are not yielding results. Despite signals from U.S. importers about the possibility of adding more products to the list of tariff exemptions or applying lower rates, the Brazilian side is making mistakes in its approach, he said.

“The government needs to make the request. It has to be done sector by sector. The request has been too broad,” he said, speaking on condition of anonymity. “They need to target the sectors the U.S. needs most right now—such as coffee, meat, fruits, and seafood—and negotiate directly. The current approach is not producing results.”

Brazilian business leaders have maintained close contact with U.S. importers, who see room for relief in the coffee and beef sectors. Agriculture Minister Carlos Fávaro has privately mentioned that seafood and fruit could also be exempt from the tax. He is betting that the inflationary impact of the tariff hike in the U.S. could help reverse the measures in these segments.

On Wednesday (Aug. 6), the Ministry of Development, Industry, Trade, and Services (MDIC) presented a so-called “contingency plan” to President Lula. Still, the Finance Ministry is calculating the cost of the assistance, which is expected to target specific companies affected by the tariffs rather than entire sectors.

Support measures
Within agriculture-related ministries, the development of support measures for exporters is still in the discussion stage. There is no clarity, for example, on how government purchases of products no longer destined for the U.S. will work or how much they will cost. The initiative is considered a certainty by the government, but officials and companies are still unclear about how it will be implemented.

Sources indicate that perishable goods, such as fruit, honey, seafood, and nuts, impacted by the tariffs will be included in government purchases. But there are two main concerns.

The first is the funding needed for purchasing and distributing the products. The 2025 budget allocates BRL 1.2 billion through the Ministry of Social Development—mostly managed by the National Supply Company (Conab) under the Food Acquisition Program (PAA)—and BRL 5.4 billion through the Ministry of Education for the National School Feeding Program (PNAE), with actions already planned for the year.

The other concern is logistics, given that these are perishable goods. Outside the scope of current government purchases, the seafood sector sent a letter on Tuesday (Aug. 5) to the Ministry of Agrarian Development (MDA) requesting the inclusion of seafood products in national food programs through direct federal government purchases to ensure production flows. The letter did not specify the volume of fish that could be purchased.

“The aquaculture sector is facing an imminent collapse, with direct effects on more than one million jobs and many Brazilian municipalities,” says the Brazilian Association of Fish Industry (Abipesca) in the letter. The request has yet to be answered. The MDA will forward it to Conab on Thursday. Production acquired by the state-owned company through the PAA is distributed to daycare centers, hospitals, public universities, and philanthropic organizations. “The current resources are very limited,” a source familiar with the matter warned.

“The implementation of this measure is essential to restore cash flow to exporting industries, prevent the shutdown of operations, protect the fishing and aquaculture production chain, avoid mass lawsuits from companies unable to meet financial obligations, and preserve jobs, income, and the dignity of communities directly affected,” the Abipesca letter adds.

Dissatisfaction
On Monday (Aug. 4), the association’s executive president, Eduardo Lobo, had already expressed frustration over the government’s delay in presenting practical measures to counter the tariffs. “Our timeframe is not medium term—it’s short term. It’s no use for the government to act with urgency if we are not given support. We need help yesterday,” he told reporters after attending a meeting of the Interministerial Committee on Negotiation and Economic and Trade Countermeasures.

“The meeting was more of the same. For the productive sector, no effective measure came out of it (…). It’s very frustrating for now,” he said.

Honey producers and exporters also do not know how the government’s purchase demand will be met. “It is still not clear to us how this will work. In terms of progress in the discussions, we have not had anything practical yet,” said Renato Azevedo, president of the Brazilian Association of Honey Exporters (Abemel). Meanwhile, the group is intensifying contact with U.S. importers to try to reverse the tariffs.

“We are contacting our business partners in the U.S. to try, through the U.S. Congress, to reduce tariffs on Brazilian honey, since it is primarily organic and U.S. production of organic honey does not meet their demand,” Azevedo explained.

Coffee sector
The coffee sector is relying on engagement with U.S. peers, traders, importers, and coffee shop chains to attempt to have Brazilian coffee included on an exemption list, as it is a product the U.S. does not produce in sufficient quantities for domestic needs. The country is the world’s largest coffee consumer, with an estimated annual demand of 24 million bags.

“In the event that this does not happen, we will continue working to have coffee included on Brazil’s exemption list, removing it from the additional 40% tariff and taxing it instead at the 10% rate from the first announcement in April, which would put the country on equal footing—or even at an advantage—compared to its main competitors supplying the U.S. We have a positive outlook and remain hopeful that one of these scenarios will occur,” said Marcos Matos, CEO of the National Coffee Exporters Council (Cecafé), in a statement.

The Brazilian Association of Soluble Coffee Industry (ABICS) warns that the tariff hike “represents a significant and unprecedented challenge” to the competitiveness of the national product in the U.S. market. The group said in a statement that it “has intensified dialogue and negotiation efforts” with the U.S.

“Our primary goal is to seek reversal of this measure or, at the very least, ensure tariff exemptions for all Brazilian coffee, both in raw and processed forms,” said executive director Aguinaldo Lima.

Fruit in beverages
On another front, the Agriculture Ministry is considering raising the minimum required fruit juice content in beverages such as packaged juices, soft drinks, and fruit drinks. Internally, technical staff point out difficulties in implementing the initiative in the short term, as it would require absorbing products no longer exported. This is because manufacturers have already established formulas and procurement schedules for raw materials and production.

The Brazilian Association of Soft Drink and Non-Alcoholic Beverage Industries (Abir) said in a statement that it understands the complexity of the moment and the importance of evaluating alternatives, but stressed that, so far, there has been no formal consultation from the government on adjustments to the minimum fruit content in certain beverage categories.

Source: Globo Rural

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