Brazilian agribusiness faces $5.8 Bn export hit from U.S. tariff hike

The Brazilian Confederation of Agriculture and Livestock (CNA) estimates that the United States’ tariff hike could reduce Brazil’s agribusiness exports to the U.S. by US$5.8 billion per year. The imposition of 50% tariffs on Brazilian goods starting in August could cut exporters’ revenues in half for 2024.

According to the organization, some products will be affected more severely than others. In the case of orange juice, the tariff would make it impossible for the Brazilian product to access the U.S. market, resulting in zero export volumes. For beef and beef tallow, exports could fall by 47% and 50%, respectively. The expected drop for wood products ranges from 25% to 100%, according to CNA estimates.

Green coffee may experience a more minor relative impact due to the reduced global supply in recent years, making it more challenging to substitute. CNA projects that even with the 50% tariff, sales to the U.S. would decline by only 25%.

Here is a historical overview of Brazilian coffee exports to the U.S. starting from January 2022. The chart was created using DataLiner data:

Brazilian Coffee Exports to the United States | Jan 2022 – May 2022 | TEUs

Source: DataLiner (click here to request a demo)

In its analysis, the CNA considered the US$12.1 billion worth of Brazilian agribusiness products exported to the U.S. in 2024, as well as the price elasticity of U.S. goods imports, which measures how import volumes respond to changes in prices.

“The assumption is that the tariff shock will be fully passed on to import prices. In other words, a 50% hike in tariffs would result in a 50% increase in final prices,” the entity said.

The indicator was calculated based on U.S. trade data from the past five years. “Most agribusiness products exported to the U.S. have an elasticity below -1, indicating higher sensitivity to price variations,” CNA explained. The lower the index, the greater the impact on U.S. imports. “Based on the elasticity of U.S. goods imports, the total value of imports is expected to fall by 48%,” the entity said.

Impacts

Orange juice exports currently face tariffs of 5.26% to 6.13% to enter the U.S. In 2024, exports totaled 1 million tonnes, generating US$795 million. With the tariff hike set to start in August, if confirmed, the rates would rise to between 55.26% and 56.13%, which would likely halt any future sales.

For green coffee — unroasted and non-decaffeinated — there is currently no import duty. U.S. imports reached 439,000 tonnes in 2022, generating $ 1.9 billion in revenue. With the new 50% tariff, CNA estimates that Brazilian exports would fall to 329,000 tonnes and revenues would decline to US$1.4 billion. Both represent a 25% drop.

In the case of sugar, exports are projected to plunge 74% in volume compared to the 1.035 million tonnes exported in 2024. With the higher tariffs, shipments are expected to fall to 266,000 tonnes. Revenue would drop by 33%, from US$1.8 billion to US$1.2 billion, as sugar already faces a 40.6% tariff. The additional 50% hike would bring it to 90.6%.

Beef currently faces tariffs ranging from 0% to 26.4%. In 2024, Brazilian meatpackers exported 183,000 tonnes to the U.S., earning US$1.9 billion. With the new tariff structure ranging from 50% to 76.4%, exports are expected to decline to 97,000 tonnes, representing a 47% drop. Revenues would also fall by 33%, to US$1.2 billion.

For bovine, ovine, or caprine tallow, the projected decline under the higher tariff scenario is 50%, resulting in a volume of 167,000 tonnes and a revenue of US$176 million. These exports currently face a tariff of only 0.3%.

For other solid forms of cane sugar, beet sugar, and chemically pure sucrose, which saw 198,000 tonnes exported with a 30.1% tariff, CNA believes that sales will cease completely under the additional 50% tariff. That would bring the US$149 million in revenue from 2024 down to zero.

Wood chemical pulp, doors and thresholds, and other wooden products are also expected to see impacts of 25%, 93%, and 77%, respectively, in export volumes from 2024. In the case of ethyl alcohol, the confederation forecasts a 71% decline in both volume and export value.

Source: Globo Rural
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