China boosts Brazilian processed food imports as U.S. tariffs hit trade

One month after the 50% surtax imposed by U.S. President Donald Trump, Brazilian exports of processed foods have faced a sharp decline. In August, shipments to the U.S. dropped 27.7%, totaling US$332.7 million. The downturn reflects a rush of shipments in July, when Brazilian companies attempted to anticipate the impact of the new tariff.

Export Redirection
With reduced sales to the U.S., China and Mexico have emerged as alternative markets for Brazilian products. Together, these countries absorbed 26% of exports, with China importing US$1.3 billion—a 10.9% increase compared to July. Mexico accounted for US$221.15 million, focused mainly on animal protein.

The Brazilian Food Industry Association (ABIA) estimates that sales of products affected by the surtax could fall by as much as 80% between August and December, resulting in a potential loss of US$1.3 billion. Abia president João Dornellas stressed that the slump in U.S. sales reinforces the urgency of diversifying export markets.

Most Affected Segments
The sectors hardest hit by the surtax were sugar and meat. Sugar exports fell 69.5% in August, while meat exports dropped 45.8%. These figures reflect the loss of competitiveness caused by the new costs of accessing the U.S. market. Prepared foods also took a hit, with a 37.5% decline compared to July.

Although orange juice was exempt from the surtax, its exports fell 11% in August after peaking in July. Abia also noted that China’s share of Brazilian processed food exports reached 22.4%, underlining its role as an anchor market for Brazil.

Source: Na Tela

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