Industries in Rio Grande do Sul redirect exports to offset impact of U.S. tariffs

Seven sectors in Rio Grande do Sul redirected exports originally bound for the United States to other markets in the last quarter: tobacco, arms and ammunition, vehicles, rubber, stone products, iron/steel, and furniture. The finding comes from a technical study by Oscar Frank, chief economist at CDL Porto Alegre (CDL POA), which analyzes how 10 industries responded to the U.S. tariff increases on Brazilian goods.

When looking at the state’s export performance to the rest of the world — excluding the U.S. — tobacco exports, for instance, rose 61.5% to Indonesia and 15,375% to Switzerland during August and September compared to the same period in 2024.

To assess the impact, the study created a scenario in which the U.S. tariff hikes had not occurred, extrapolating the trend from the months when the measures took effect.

“The tariff hike began in August, but in reality, by July, we had already seen different behavior among economic agents, as some managed to anticipate shipments. We tried to project what would have been expected for July, August, and September and compared it with what actually happened,” Frank explained.

According to the analysis, the seven sectors identified were able to offset a significant portion, if not all, of the losses in shipments to the United States.

The economist noted that the impact of the tariffs was uneven. Products with more diversified international demand were more successful in redirecting at least part of their exports, while industries dependent on regulated niches with few buyers suffered declines. The wood, footwear, and aluminum sectors showed negative estimates, indicating net market losses even when excluding exports to the U.S.

The CDL POA study, released on Monday, also found that Rio Grande do Sul was among the states most affected by the tariffs, with an average effective rate of 44.7%, higher than the national average of 34.6%. The variation among states reflected differences in the share of products excluded from the tariff list and their relative weight in exports to the U.S. between January and September 2025.

Source: Correio do Povo

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