Brazil Machinery Exports to U.S. Seen Collapsing from September on Trump Tariffs, $300 Mln Monthly Loss Expected

The impact of the 50% tariff on machinery and equipment announced by the Trump administration is expected to be felt mainly from September. Exports to the U.S. “will tend to zero” due to the sharp loss of competitiveness caused by the surcharge, said Cristina Zanella, Director of Competitiveness, Economics and Statistics at the Brazilian Machinery and Equipment Industry Association (Abimaq).

“The United States represents 26.26% of our exports, making it a very relevant market. The deterioration in sales to this market starting next period is expected to result in a monthly decline of approximately US$300 million in exports, which will impact our revenues. In August, growth may still be observed compared to July, due to the anticipation of orders by manufacturers. From September onwards, however, the monthly decline of US$300 million is expected to persist until the end of the year,” she explained.

The association maintains its forecast of 5% growth for the year. For exports, however, the projection is a 15% drop, mainly due to the loss of the U.S. market. For the U.S. alone, exports are expected to fall by around 30% in the final months of 2025.

According to Zanella, even with the U.S. Commerce Department’s measure classifying exports containing steel and aluminum under Section 232 of the Trade Expansion Act, Brazil remains uncompetitive compared with most countries.

“When we look at machinery not specifically related to steel or aluminum, the surcharge is 50%. That narrows the gap somewhat, but we remain less competitive, except in relation to India, which has the same reciprocal tariff as Brazil. Compared with Canada and Mexico, the situation is much worse, since tariffs there are zero. Both are major suppliers of parts, components, and machinery to the U.S., especially Mexico,” she said.

Between January and July, exports to the U.S. fell 10.6%, mainly due to weaker demand for construction machinery (-21%). These products accounted for 44% of exports in 2025, compared with 51.2% in 2024.

Regarding government support measures, Zanella noted that industry views them positively, particularly the Reintegra program, but expects it to be more comprehensive than announced. “It would have little relevance if companies simply stopped exporting to the United States. What we expect is for the government to expand Reintegra to all exporters, regardless of market, to boost competitiveness and allow companies to expand globally. We know budget limits exist, but this would be an emergency measure providing extra relief in this crisis,” she said.

So far, the sector has not seen job losses. In fact, employment increased by 1% in July compared to June. “Because labor is highly skilled, companies are reluctant to lay off workers they have invested in training. Up to July, there have been no significant cuts, and it is unlikely that there will be any in August, as it was a period of rush deliveries. Any impact will be more visible from September and October,” she added.

Source: O Globo

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