Abimaq revises outlook, says exports to US will fall but not to zero

Brazilian exports of machinery and equipment to the United States are expected to fall under the U.S. administration’s new tariff package, but not to zero. According to Abimaq, the association representing manufacturers, surveys of Brazilian companies operating in the U.S. market show that negotiations with American firms are progressing, in some cases including agreements to share losses, which has helped revise the earlier, more pessimistic outlook.

“Part of the tariff is paid here in Brazil, part there in the U.S. In other cases, projects are being maintained at least through this year. It is possible that our expectation of exports dropping to zero may not materialize. They will probably decline, but not to zero, because companies are saying that deliveries are still being made,” said Cristina Zanella, Abimaq’s director of Competitiveness, Economics, and Statistics, in a presentation to journalists last Wednesday (1), when the sector’s August results were released.

At the presentation of July data in August, Abimaq had warned that exports to the U.S. could fall to zero as early as September. Zanella now says forecasts indicate a 15% drop in the sector’s exports this year, with a 30% decline to the U.S., but these figures are likely to be revised to smaller decreases.

“Our strategy now is to wait for the September numbers, which will give us a clearer picture of how exports to the United States will play out in the coming months,” she said.

Exports of machinery to the U.S. accounted for 25.9% of Brazil’s total external sales from January to August and were down 7.5% in the year to date. However, they rose in August, Zanella noted. “If I compare total exports in August with August last year, exports to the U.S. grew 16%. If I look at road machinery, which makes up 52% of everything we export to the U.S., it grew 67.7%,” she said.

She suggested the increase may reflect an advance in shipments ahead of the new 40% tariff, which, combined with existing duties, brought the total rate to 50% for certain segments of Brazil’s industry and took effect in early August. “There was already anticipation in July. When we examined the data, some sectors had already demonstrated strong growth, such as machine tools, which are also a significant export to that market. Others maintained this anticipation effect in August,” she explained.

According to Abimaq, the scale of the tariffs’ impact on the sector, especially in 2026, will depend on the success of ongoing negotiations and on the ability of Brazilian companies to redirect their products. “A company currently trading with the United States may begin to target other markets, but that takes time. Still, we see companies already positioning themselves for this shift in order to safeguard themselves and their markets under this new scenario,” Zanella said.

Source: Valor Econômico

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