Brazilian Pulp Exports to U.S. Plunge Amid Trump’s New Tariff Measures

U.S. President Donald Trump’s decision to impose a 50% tariff on Brazilian products exported to the United States has delivered another blow to Brazil’s pulp and paper industry, which had already been struggling with the initial effects of the “tariff hike” since April.

Brazil is the world’s largest exporter of pulp, averaging 18 million tonnes exported annually, according to the Brazilian Tree Industry (Ibá). China is the top consumer market, accounting for approximately 30% of Brazil’s exports, followed by the United States.

Analysts say Suzano, the world’s largest producer of short-fiber pulp, would be among the most affected companies if the measure were to take effect. Estimates suggest that between 15% and 19% of Suzano’s net sales come from operations in the U.S.

During a virtual event hosted by the Brazil-U.S. Chamber of Commerce on July 15, Guilherme Miranda, Suzano’s managing director for the Americas, said the company will seek alternative markets for its products.

However, Daniel Sasson, an analyst at Itaú BBA, noted in an interview with Valor Econômico that Suzano’s production volume is massive, making it challenging to reroute supply chains quickly.

“In my estimates, the company shipped around 1.7 million tonnes of pulp to the U.S. in 2024. It’s not easy to redirect that entire volume to Europe or China overnight, especially in a moment of global trade uncertainty,” said Sasson.

From January to June 2025, Brazilian pulp exports rose 8.5% in value and 14% in volume, according to trade balance data. Shipments to the U.S., however, dropped 15.2% in value and 8.5% in volume, according to the Brazil-U.S. Chamber of Commerce. In May alone, the value fell by 35%.

Here is a historical overview of Brazilian pulp exports to the United States starting from January 2022. The chart was prepared using DataLiner data:

Brazilian Wood Pulp Exports to United States – Jan 2022 to May 2025 – TEU

Source: DataLiner (Click here to request a demo)

Companies with operations in other countries may attempt to leverage this advantage to maintain exports to the U.S., although not without challenges. “There’s a possibility of exporting via Chile, where we have three plants. But this tariff hurts the new project—it’s not what we want,” said Antônio Lacerda, head of pulp at CMPC Brasil. The company already operates a mill in Guaíba (RS) and is planning to build a new one in the state.

Despite the short-term challenges, Sasson said that over the medium to long term, supply chains tend to rebalance. “Whoever can supply the U.S. more efficiently will do so, but that will leave another market underserved—and that’s how the market adjusts,” he said.

On the social media platform X, Ibá’s CEO, Paulo Hartung, urged restraint and diplomacy: “At this moment, it’s essential to avoid bravado and focus on negotiation and diplomacy.” Hartung participated in a recent meeting between industry representatives and the federal government, where they advocated for a delay in implementing the tariff. If no deal is reached, the new tariff is scheduled to take effect on August 1.

Industry representatives also expressed opposition to retaliatory tariffs from Brazil under the Economic Reciprocity Law. Meanwhile, the market is bracing for a seasonally weaker third quarter and ongoing uncertainty in negotiations.

“Producers exporting to the U.S. are still trying to understand the outlook, which makes it difficult to implement price hikes,” Sasson said.

Since the first wave of tariffs was announced in April, negotiations between producers and clients have stalled, driving down short-fiber pulp (BHKP) prices in China, which had been recovering earlier this year.

In April and May alone, BHKP prices in China dropped by $70 per tonne, according to the Foex index from Fastmarkets. Year-to-date, prices have fallen $44 and recently stabilized at around $500 per tonne.

This level is believed to be near the cycle’s bottom, as many producers are now operating at a loss. Itaú BBA estimates that 14 million tonnes of short- and long-fiber pulp are currently being produced without generating profit.

“When that happens, we start seeing announcements of capacity closures or extended shutdowns, which can help adjust supply,” Sasson explained. Recent examples include Finland’s Metsä Fibre and Bulgaria’s Svilosa, which removed 690,000 tonnes of long-fiber and 150,000 tonnes of short-fiber pulp per year from the market, respectively.

Another signal of a potential rebound is growing demand for market pulp from paper manufacturers in China, where prices are currently around $480 per tonne. “I still expect a price recovery starting in Q4, but it won’t be a strong one,” said Lacerda of CMPC.

Source: Valor Econômico

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