Experts warn redirecting exports hit by U.S. tariff will be a slow process

Opening new markets to redirect Brazilian products affected by the United States’ 50% tariff is a lengthy and challenging process that will not yield results in the short term, warn foreign trade experts. Brazil may eventually find opportunities in Asian countries—excluding China, which is currently the primary market for Brazilian products.

They explain that opening new markets can take months or even years. This is not to mention the bureaucracy involved in removing non-tariff barriers, such as sanitary licenses, as well as the time it takes for companies in each country to establish business contracts. All of this is happening in a volatile global environment, where the new U.S. tariffs are impacting several countries simultaneously, prompting them to seek alternative markets.

Estimates of the share of Brazilian exports affected by the additional tariff vary. The Ministry of Development, Industry, Trade, and Services (MDIC) estimates that the tariff will affect 35.9% of Brazilian exports to the U.S. Since exports to the U.S. totaled US$40.3 billion in 2024, this means that approximately US$14.5 billion is at risk due to the tariff imposed by President Donald Trump’s administration.

Former Secretary of Foreign Trade and partner at BMJ Consultoria, Welber Barral, divides the affected products into three groups. The first category includes commodity foods such as coffee and meat. Due to their characteristics, these products will have a higher likelihood of being relocated, either elsewhere in the world or still within the U.S., but at the cost of lower prices—since the tariff effectively reduces U.S. and global demand, while supply remains unchanged.

The second group includes industrial products, especially machinery. In this case, the natural destination would be the Latin American markets, particularly those in South America.

“China, Indonesia, and India are large markets, but without the same purchasing power as the U.S. Moreover, they can absorb commodities, since Brazil can’t compete in industrial products in those markets—except in niche segments,” Barral says.

The final group consists of Brazilian subsidiaries of U.S. companies. These have the worst prospects, he believes. “Most likely, the parent companies will look to other factories around the world, in countries with lower tariffs, to manufacture their goods. Any investment plans in Brazil are also now in limbo because they can no longer be certain of exporting to themselves.”

The search for new buyers is also hindered by global demand levels and supply conditions in other regions, notes José Alfredo Graça Lima, vice-chair of the board of the Brazilian Center for International Relations (CEBRI).

Coffee, he points out, has a large share of its production destined for the U.S., and in his view, global demand is already largely met. “If we can’t find another market to replace the U.S., the product’s price will be affected,” he says.

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

Brazilian Coffee Exports to the United States – Jan 2022 to May 2025 – TEU

Source: DataLiner (Click here to request a demo)

Lia Valls, head of the Department of Economic Analysis at UERJ and associate researcher at FGV IBRE, notes that entering new markets requires meeting buyers’ quality standards—a process that can take time.

“These adjustments aren’t impossible, but they won’t be made quickly, and not all products will be able to adapt,” she says. “The problem is that each market has its quality certification. Europe, for instance, has stringent standards for certain products.”

Machines and shoes will face more challenges, says Valls. “Some machines are made to order for specific companies, and shoes are manufactured to specific sizes. These products will therefore require deeper adaptation for new markets,” she explains.

Given the situation, the best-case scenario may be for the list of exemptions to the tariff hike to be expanded, says José Augusto de Castro, executive president of the Brazilian Foreign Trade Association (AEB). “I believe this list will grow. For some products, it simply doesn’t make sense to be excluded,” he says, citing coffee specifically—a product not grown in the U.S.

In the short term, the best option may be to focus on existing markets, says Mirella Hirakawa, Head of Research at Buyside Brazil. “The question is whether there will be an appetite to absorb the excess supply.”

In the case of beef, 10.3% of Brazilian exports in the first half of the year were sent to the U.S. Part of that could be absorbed by China, which accounted for 51.6% of Brazil’s beef exports.

Other products that could follow a similar path, says Hirakawa, include coffee—the European Union buys about 33.8% of Brazilian exports, compared to 16% by the U.S.—and ethanol. In this case, China and South Korea each purchase more than double what the U.S. does (11.8%).

Carlos Frederico Coelho, researcher at the BRICS Policy Center and professor of international trade at PUC-Rio’s Institute of International Relations, says Brazil can look to other Asian countries beyond China.

“It’s hard not to look at Asia—I think the continent is perhaps the next big frontier for protein sales. The question is, how much more can Brazil sell there? Since we already export protein to the region, we’ll need to expand beyond China,” he says.

For coffee, he explains, what may help with market reallocation in the medium and long term is the fact that global demand exists. “The Brazilian coffee that will no longer go to the U.S. will be replaced there by another source. But that will, in turn, open up space elsewhere,” he explains.

Due to their highly customized production, Brazilian shoes—which are also subject to the 50% U.S. export tariff—cannot be redirected to other markets, explains Haroldo Ferreira, executive president of the Brazilian Footwear Industry Association (Abicalçados). “I can’t just take this shoe and export it to Chile or Europe, for example, because it was developed for the specific demands of that buyer,” he says.

Ferreira explains that 22% of all footwear exports go to the U.S. “Last year, we exported US$216 million, totaling 10.3 million pairs of shoes,” he says. “In the first half of 2025, we exported 5.8 million pairs, meaning a growth of 13.5%. For other countries, growth was 8.8% in the same period.”

For the textile sector, relocation will be “costly,” since the international market relies on infrastructure such as contact points, distribution centers, and commercial networks, says Fernando Valente Pimentel, managing director of the Brazilian Textile and Apparel Industry Association (Abit).

“You can’t just switch destinations. They don’t appear overnight,” he says. “The only viable route is the domestic market, which has its specific demand patterns.”

Pimentel notes that the U.S. market is one of the three most important export destinations for the textile sector. “We expected to sell around R$500 million this year, of which we had already reached about half by mid-year,” he says. “But now, with the tariff hike, nearly everything is at risk.”

In seeking new outlets, Pimentel considers the conclusion of the EU-Mercosur agreement the industry’s top priority. “The agreement could open up new avenues for trade, investment, acquisitions, and operational or technological partnerships,” he says.

Source: Valor Econômico

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