Half of municipalities trading with the US saw exports fall an average of 30%

US President Donald Trump’s tariff policy was not enough to derail growth in Brazil’s overall exports, but it affected municipalities that send a substantial share of their exports to the United States.

Brazilian exports rose by US$31.8 billion in the 12 months through July, but sales to the United States fell by US$6.7 billion over the same period. The period covers the first year following the imposition of the heavier US tariffs specifically targeting Brazilian exports, beginning in August 2025.

A total of 1,643 municipalities traded with the United States over the past two years, and more than half of them—864—recorded an average decline of 30% in export value during the period analyzed compared with the preceding 12 months. That represented a combined negative impact of US$9.7 billion on local economies. Over the same comparison period, shipments to the United States fell to zero in 271 municipalities, from a previous total of US$104 million.

Data compiled by the National Confederation of Municipalities (CNM) show that, even with a substantial share of exports redirected elsewhere, the US market remains important to economic activity in a significant share of municipalities: 30% of Brazilian municipalities, or 1,643, had direct trade ties with the United States over the past two years.

The five products whose exports were most affected during the period analyzed were coniferous wood, other cane sugars, semi-finished iron and steel products, beef tallow, and doors and door frames.

According to data compiled by Datamar, Brazilian sugar shipments to the United States reached approximately 201,500 metric tons through August, down 30.7% from the same period a year earlier. See more details on these shipments below:

Sugar Exports to the United States | Jan 2024 – Aug 2026 | WTMT

Source: DataLiner – explore our trade data

Among Brazil’s 26 states, Espírito Santo has the largest share of municipalities with these trade ties, at 68%. Rio de Janeiro and São Paulo follow, at 59% and 54%, respectively.

The CNM study identifies São João da Barra, in Rio de Janeiro state, as the municipality with the largest losses in exports to the United States during the period, primarily involving exports of mineral fuels, mineral oils and products of their distillation, with export revenue losses of US$590 million. The cities of Rio de Janeiro and Santos also suffered losses in the same categories. Exports of horticultural products were also affected, particularly in Araraquara, São Paulo state.

Coffee was one of the hardest-hit export sectors. The study highlights the impact on Guaxupé, in Minas Gerais. Marcos Matos, executive director of the Brazilian Coffee Exporters Council (Cecafé), says that although Europe and Asia now hold prominent positions in the coffee sector, the trade partnership with the United States goes back decades, making it difficult to give up that market.

Since 50% tariffs were imposed on coffee and coffee products in August last year, Matos says, the sector “raced against time” to have them reversed. The urgency stemmed from fears that Americans would adapt to coffees other than Brazilian varieties, causing Brazil’s coffee industry to lose market share once the tariffs were lifted.

In November 2025, a list of exemptions from the US tariff increases included roasted and unroasted coffee, both decaffeinated and non-decaffeinated, as well as coffee husks and skins and coffee substitutes containing coffee. Coffee extracts, essences and concentrates were also included.

After more than a year under the tariff regime, surcharges on all types of coffee were lifted in July 2026. According to a Cecafé report, in the first tariff-free month, coffee exports posted their best August on record, reaching 4.16 million bags. From January through August, the United States was the leading importer of Brazilian coffee, accounting for 12.6% of shipments. Compared with the same period in 2025, however, the latest figure was 21.6% lower.

Minas Gerais recorded a significant decline in cast iron exports. The CNM study highlights losses primarily in Sete Lagoas and Ouro Branco, as well as in Serra, Espírito Santo. According to the study, export losses in the three municipalities totaled US$370 million from August 2025 through July 2026.

Felipe Ramon, an international business analyst at Fiemg, the federation representing industry in Minas Gerais, says that although the sector is now exempt from the tariff increases, its vulnerability left it exposed to their impact, which also affected revenue collection in the municipalities where it operates. Ramon explains that the difficulty of diversifying markets for Brazilian iron makes the sector even more vulnerable.

“Unlike commodities that are intended for consumption and can be redirected more easily, the process is different for pig iron because we can’t simply set up new steel mills around the world to consume it and make steel. Not to mention that the industry in the United States is already fully set up to use this iron,” Ramon says.

The US government exempted pig iron from the tariffs in July this year, but Ramon says exports have yet to return to their previous pace. “Exports to the United States are still low because buyers built up inventories out of concern about the tariffs, and some of those inventories are still high.” Against that backdrop, he explains, exports to other countries exceeded shipments to the United States for the first time in September.

The study shows that the US share of Brazilian exports shrank from 12.3% in August 2025 to 9.4% in July this year. During that period, export revenue from sales to the United States fell 16.2%. In September this year, exports to the United States rose 31.9%, but shipments in the first nine months of 2026 were still down 6.5% from the same period last year. Brazil’s total exports rose 10.4% over the same period.

According to CNM, midsize municipalities by population—443 in total—recorded the largest absolute decline in export value, at US$3 billion, or 20.6%. Smaller municipalities, numbering 1,107, followed with a decline of US$2.1 billion, or 22.9%, while the 93 most populous municipalities proved more resilient, with losses of US$1.6 billion, equivalent to a 9% decline.

Of the 1,135 municipalities that recorded a negative impact on sales to the United States, either because shipments ceased or declined, 657—equivalent to 58% of the total—also suffered a net loss in export markets overall. According to CNM, these municipalities recorded a US$5.4 billion decline in trade with the United States, while their exports to global markets fell by US$17.7 billion.

Even as many municipalities recorded losses, some achieved positive results and increased exports over the past 12 months, whether because of broader economic conditions or international prices. Pindamonhangaba, in São Paulo state, for example, recorded a gain of US$252 million, led by exports of aluminum and articles thereof. Petrópolis, in Rio de Janeiro state, and Piracicaba, in São Paulo state, also increased sales, primarily of nuclear reactors, boilers, and mechanical appliances and instruments.

For José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), the picture shows how concentrated exports are and, as a result, how exposed they are to protectionist policies, requiring exporters to adapt to changing circumstances, as happened with beef.

Last year, he recalls, beef became subject to the US tariff increases in August and was only exempted from the heavier US tariff in November, when a new list of exceptions was published. During that period, Brazilian exporters managed to redirect sales, and beef shipments did not decline. On the contrary, data from the Ministry of Development, Industry, Trade and Services (MDIC) show that shipments of chilled and frozen beef rose 52.1% from August through November 2025, even as shipments to the United States fell 55.3%. Shipments to China, meanwhile, rose 66.3%.

Castro notes that China was one of the largest buyers of the product last year. This year, however, the Asian country imposed quotas that Brazil has already exceeded. He explains that the difference from the situation involving the United States is that China’s protectionist policy does not target Brazil alone, as some of Trump’s tariffs do.

Amid declining exports from some municipalities, CNM President Paulo Ziulkoski advocates trade diversification aimed at expanding the number of exporting companies, including small and midsize businesses.

“It is essential to invest in training and guidance that show businesses how to export, as well as to bring suppliers and international buyers closer together,” Ziulkoski says.

Source: Valor Econômico

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