Brazil offsets U.S. tariff losses by redirecting exports to other markets

Exports to the U.S., considering the group of products affected by the tariff hike and for which Americans account for at least 5% of Brazilian exports, fell from August to October this year compared with the same months of 2024, but increased to the rest of the world. More than that, the total value lost in sales to the U.S. market for this group of goods was outweighed by the increase in revenue from shipments of those same items to other markets.

From August to October this year, aggregate sales to the U.S. of 1,503 goods affected by the tariff hike generated US$1.58 billion, less than in the same three-month period last year. For the rest of the world, the same group of products generated US$3.1 billion more in Brazilian exports, compared to the same period.

The threshold of at least 5% of exports to the U.S. was based on export values shipped from August to October 2024. This cut represents 96% of the total value of all products affected by the tariff increase exported by Brazil in that quarter.

The figures were compiled by Valor Econômico using data from the Foreign Trade Secretariat (Secex/MDIC). The list of products affected by the tariff was prepared by the Institute for Studies in Industrial Development (IEDI). The list includes not only products hit by the 50% tariff hike, but also those impacted by Section 232, implemented by U.S. President Donald Trump in April this year. The 50% tariff — one of the highest imposed by the United States — was announced by the Trump administration at the end of July.

“Overall, the U.S. tariff hike is not a catastrophe. There is no loss from a macroeconomic perspective, although the signal sent by the American measures is negative,” says Rafael Cagnin, chief economist at IEDI. “The data shows a significant ability to redirect exports of the affected products. The aggregate reflects more the products with greater weight, many of them linked to the early stages of the production chain and less dependent on the United States.” However, he cautions, this does not eliminate the burden for some products and sectors, especially those more exposed to the U.S. market.

The data shows heterogeneous behavior among the exported products. Of the 1,503 items, 364 (24.2%) increased in export value to the U.S. during the quarter ending in October compared with the same months last year. In other words, those products were not affected in that period.

Of the remaining 1,139 items that saw a drop in shipments to the U.S., 463 also saw a decline or no change in export revenue to other destinations. In 30% of the products analyzed, there was a loss in sales to the U.S. without compensation in other markets. In the other 676 products, export revenue to the rest of the world increased compared with the quarter ending in October 2024, but in 261 cases the additional value exported to other markets was not enough to offset the loss in U.S. sales. In 17.4% of the universe analyzed, the compensation was only partial. In the remaining 415 items (27.6%), the value exported to the rest of the world exceeded the loss from reduced shipments to the U.S. market.

Exports of goods not exempt from the tariff hike totaled US$ 3.76 billion from August to October 2025, compared with US$ 5.3 billion in the same months last year. To the rest of the world, the same group of products generated US$ 18.2 billion in Brazilian exports in 2025, up 20% from US$ 15.2 billion in 2024, considering only products for which the U.S. accounted for at least 5% of Brazil’s exports.

See below a historical chart of Brazilian container exports to the United States from January 2022 onward. The chart was prepared using DataLiner data:

Brazilian Container Exports to the United States | Jan 2022 to Sep 2025 | TEUs

Source: DataLiner (click here to request a demo)

President Luiz Inácio Lula da Silva met with Trump at the end of October in Malaysia, with the expectation of negotiating a reduction in the impact of the American tariff increase on Brazilian products.

Total Brazilian exports to the U.S., including both exempt and non-exempt items, fell over the past three months. According to Secex, in August — when the tariff increase went into effect — exports dropped 16.5%, followed by a 20.3% decline in September. In October, the drop deepened to 37.9%, always compared with the same month in 2024. In the quarter ending in October, total exports to the U.S. fell 24.9%. Exports of products affected by the tariff declined even more sharply, by 29.6%. As a result, the share of items hit by Trump’s tariff policy dropped from 52.3% in 2024 to 49.1% in 2025 within Brazil’s total exports to the U.S. from August to October.

For Lia Valls, professor at Rio de Janeiro State University (UERJ) and associate researcher at the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV Ibre), the data shows that Brazil’s ability to redirect key products previously sold to the U.S. has allowed total exports to rise. “However, this does not mean that negotiations with the U.S. are not extremely important. The American market remains relevant, even if the tariff impact may be smaller than expected. This gives Brazil more leverage in negotiations.”

In an analysis of the 50 largest products exported to the U.S. in 2024 among those affected by the tariff increase, Cagnin notes that 23 (46%) were unable to offset the loss in sales to the U.S. in the quarter ending in 2025. “Brazil’s competitiveness in products at the start of the production chain allows for easier adjustment. But products with more processing, which are more exposed to Brazil’s structural competitiveness issues, face greater difficulty. It’s also important to consider other factors, including product-specific dynamics.” Some items, he notes, face limited global demand growth, making redirection difficult.

The data shows very different patterns across products. Among the items affected by Trump’s tariff policy, the largest export product to the U.S. is semi-manufactured iron and steel, which totaled US$ 491.3 million in sales to the U.S., down 16.4% from 2024. For the rest of the world, exports rose 27.2% during the same period. Yet, Brazilian exports of the product are heavily dependent on the U.S., which absorbed 65.7% of shipments in the quarter ending in October. In this item, the increase in revenue from other markets added US$ 54.9 million, but was not enough to offset the US$ 96.1 million loss in sales to the U.S.

In Brazilian coffee exports, the situation was the opposite. Shipments to the U.S. fell 16.7%, while exports to the rest of the world rose 14.5%. The revenue loss to the U.S. was US$ 71.2 million. Increased shipments to the rest of the world generated US$ 409.4 million. Low dependence on the U.S. market — now 9.9%, down from 13.1% in 2024 — helps explain the result.

A similar dynamic occurred with frozen beef: exports to the U.S. fell 60.5%, but rose 64.3% to other markets. The loss in U.S. sales was US$ 165.2 million, but the additional revenue in other destinations reached US$ 1.7 billion. The U.S. share of this product dropped from 9.3% in 2024 to 2.4% this year in the quarter ending in October.

André Valério, economist at Inter, highlights that beef sales to Mexico increased following the U.S. tariff increase. Brazilian exports of boneless beef to the U.S., including chilled and frozen beef, totaled US$ 137.9 million from August to October this year, down 53.7% from the same period in 2024. To Mexico, shipments reached US$ 204.8 million — up 174.3%. To China — the top destination — sales rose 66.3%, totaling US$ 2.98 billion in the same period. Beef exports also grew to Chile, the Philippines, and Russia by 47%, 36.3% and 67.8%, respectively. All five countries absorbed more Brazilian beef than the U.S. from August to October this year.

Some products, however, Valério notes, were not absorbed by other markets — such as certain types of wood and armaments.

Source: Valor Econômico

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