Brazil’s agribusiness not immune to new U.S. tariffs

Brazilian government officials monitoring U.S. President Donald Trump’s trade policies believe that, to some extent, the new U.S. tariffs of 25% imposed on Mexico—temporarily suspended following an agreement with President Claudia Sheinbaum—could create opportunities for Brazilian exports, particularly orange juice and coffee, to the United States.

The fruit sector could also benefit, as the U.S. imports a significant share of its fruit from Mexico. “With the 25% tariff on Mexican products, Brazilian fruit will become more competitive,” said Welber Barral, former foreign trade secretary and a consultant in the field.

However, Mr. Barral cautioned that the current volatility complicates medium-term export planning. “These measures can be revoked at any time, so there is a risk in making large-scale exports,” he said.

The chart below shows the export pattern of containers from Brazil to the US between January 2021 and December 2024. The data was derived from Datamar’s maritime intelligence tool, DataLiner.

Container Exports to the US | Jan 2021 – Dec 2024 | TEUs

Source: DataLiner (click here to request a demo)

Beyond Mexico, the U.S. also imposed 25% tariffs on Canada—suspended for one month following an agreement reached Monday—and 10% on Chinese products. Mr. Barral noted that if China and other countries retaliate against U.S. exports of soybeans, corn, and meat—sectors where American producers compete directly with Brazil—Brazilian agribusiness could gain market share.

While Mr. Barral and Brazilian government officials acknowledge the risk of U.S. tariffs on Brazil, they believe recent signals from Washington have somewhat eased concerns in Brasília.

“Donald Trump mentioned Brazil and India as having high tariffs, but he hasn’t announced any new measures against them. An interesting point is that Brazil is one of the few countries that runs a trade deficit with the U.S. Unlike the nations targeted by his latest tariffs, the U.S. actually has a small trade surplus with Brazil,” Mr. Barral said.

“He specifically complained about certain tariffs, such as those on ethanol. But overall, Brazil’s tariff policies haven’t been a major source of friction,” he added. The import tariff on U.S. ethanol, which has at times been zero, currently stands at 18%.

A former Brazilian diplomat noted that while these short-term export gains are a rare piece of positive news from the U.S., President Trump’s attacks on multilateral trade organizations pose a broader risk to Brazilian agribusiness.

“The message he’s sending to the world is that trade rules can be discarded at will, depending on the political interests of whoever is in power,” the source warned.

When contacted for comment, Brazil’s Ministry of Industry, Development, Trade, and Services (MDIC) declined to respond, stating that there were “no concrete reasons to comment on the issue.”

After a meeting at Brazil’s Ministry of Agriculture on Monday, Congressman Pedro Lupion, who chairs the Congressional Agricultural Caucus (FPA), told reporters that Brazil—particularly its agribusiness sector—should not expect to be immune to President Trump’s new tariffs.

According to Mr. Lupion, the more protectionist stance of the U.S. will require the Brazilian government and diplomats to act strategically in dealing with potential trade challenges.

Even so, he argued that the U.S. “needs” Brazil and dismissed the idea of any extreme actions. Mr. Lupion stressed the importance of closely monitoring Trump’s approach toward China, Brazil’s largest trading partner, and any potential retaliatory measures.

“We have to be careful not to strain relations with the Chinese and risk losing Brazil’s agribusiness leadership in that market,” he said.

“They need us too. It’s a matter of adjusting markets and finding the right balance,” Mr. Lupion added. He acknowledged that Brazil could face tariffs but pointed out that past trade disputes between the two countries—such as those involving cotton, orange juice, and shrimp—have been resolved over time.

By Rafael Walendorff, Globo Rural

Source: Valor International

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