Taurus sends workers on leave after 50% U.S. tariff disrupts gun exports

Taurus, a firearms manufacturer based in São Leopoldo, Rio Grande do Sul, and its parent company, CBC, are facing a significant impact from the United States’ tariff hike, which imposes a 50% tax on Brazilian exports. The measure led to at least 40 workers being placed on collective vacation since the first week of August, particularly in the assembly line destined for the U.S. market.

Taurus, which employs around 2,700 workers in the state, exports approximately 80% of the production from this unit to the United States. The affected line primarily supplies the Companhia Brasileira de Cartuchos (CBC), headquartered in Montenegro, which employs 473 people and exported around R$250 million in 2024.

Initially, the collective vacation period was set for 15 days, with the possibility of being extended for an additional two weeks. In response to the drop in exports, the company has implemented compensatory measures. These include negotiations with the state government for early release of ICMS tax credits, and engagement with unions to seek alternatives to layoffs and instability.

Taurus has also adopted operational strategies, including transferring inventory to the United States, increasing magazine production for export, and maintaining a strategic stockpile in the U.S. market. Additionally, meetings have been held with state and federal authorities, including the U.S. Embassy, the government of Rio Grande do Sul, the Ministry of Defense, and the Ministry of Finance, in an effort to secure institutional support in addressing the crisis.

At CBC’s plant in Montenegro, the situation is also concerning. The factory may implement similar collective vacation measures and has already begun to reduce production. The measure was introduced on August 11 and will remain in effect until August 25, with the possibility of an extension if negotiations with the U.S. do not move forward.

The pressure resulting from the U.S. tariff hike, which has practically rendered exports unviable, highlights the direct impact of tariff policy on Brazil’s defense industry—particularly in Rio Grande do Sul, where the sector contributes significantly to ICMS tax revenue and job creation.

Source: Diário da Manhã

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