U.S. tariff hike will affect Brazilian tobacco exports only in 2026

The United States, which imports around 40,000 tonnes of Brazilian tobacco annually, had already received 60% of the projected 2025 volume by July. According to Valmor Thesing, president of the Tobacco Industry Union (SindiTabaco), this advance shipment was prompted by the announcement of steep new tariffs on Brazilian products by U.S. President Donald Trump, which led industries to expedite their exports.

The remaining 40%—equivalent to just 1% of Brazil’s annual production—is likely to be redirected to other countries in the coming months unless an agreement is reached, as U.S. importers have halted purchases from Brazil due to the 50% tariff. The United States is the third-largest buyer of Brazilian tobacco.

At the beginning of the year, Brazilian tobacco faced an average tariff of $ 0.375 per kilogram when entering the U.S. That amount was increased by 10% in April, following Trump’s initial announcement.

Thesing believes there is a good chance of reallocating the 16,000 tonnes that were still expected to be shipped to the U.S. this year, as both Brazil and other producing countries have faced climate-related challenges over the past two years, leading to a global shortage of tobacco.

“What worries us are the next three years. For the 2025/26 harvest, industries have already signed purchase contracts with integrated producers for the first half of the year and will honor those agreements. But if no deal is made between the governments, we’ll need to find new buyers for the 40,000 tonnes elsewhere,” Thesing says.

According to him, finding alternative markets for the 30,000 tonnes of Virginia tobacco—the most widely grown variety in Brazil—should not be a difficult task. However, the remaining 10,000 tonnes of Burley tobacco, which has low sugar and high nicotine content (the opposite of Virginia tobacco), have limited demand outside the U.S.

Thesing says he participated in several meetings in July, holding out hope that tobacco—being a plant product—might be included on the U.S. government’s exceptions list. He still holds a sliver of hope, noting that Trump has made deals with other countries after initially threatening harsher tariffs. “For now, we think it’s a war of narratives.”

Last year, the sector exported 455,000 tonnes of tobacco, generating R$2.98 billion in revenue. This year’s target of increasing both volume and revenue by 10% has been undermined by the new tariff measures. “We’ll have to revise this year’s figures, but revenue shouldn’t fall below R$3 billion.”

According to data from MDIC/ComexStat (the data system of Brazil’s Ministry of Development, Industry, Trade, and Services), 206,518 tonnes of tobacco were shipped between January and June this year, generating US$1.36 billion in revenue. Export volume for the first half was 5.77% higher than in the same period of 2024, when Brazil exported 195,261 tonnes.

Brazil is the world’s second-largest producer and the leading exporter of tobacco, followed by India, which exports around 250,000 tonnes. The European Union and the Far East are the top destinations for Brazilian tobacco, each accounting for 34% of exports, followed by Africa and the Middle East (15%), North America (9%), and Latin America (8%).

Individually, the top buyer of Brazilian tobacco is Belgium, with purchases totaling US$639 million, followed by China (US$585 million) and the U.S. (US$255 million). Next on the list are Egypt, Indonesia, and Vietnam. Together, these six countries account for two-thirds of Brazil’s annual tobacco export revenue.

Source: Globo Rural

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