São Paulo and Santa Catarina bear brunt of latest U.S. tariffs on Brazilian goods

The Brazilian states of São Paulo and Santa Catarina account for 52% of the trade affected by the latest round of U.S. tariffs on Brazil. Of the $7.4 billion in exports subject to the new 25% duties, $3 billion originates in São Paulo.

Brazil’s largest state economy alone represents 41.6% of the total value affected. The tariffs cover about 20% of São Paulo’s exports to the United States.

Santa Catarina faces an even greater impact in proportional terms, with 68% of its exports to the U.S. market subject to the new duties.

The figures were released by the Brazilian Trade and Investment Promotion Agency, ApexBrasil, which is linked to the Ministry of Development, Industry, Trade and Services. The agency has announced a R$130 million plan to help affected companies diversify their export markets.

Paraná’s wood industry is also expected to face significant disruption. Brazil supplies 30% of U.S. wood imports, and Paraná accounts for 66.7% of that Brazilian volume.

“This is bad for companies in Paraná that operate in this industry. It is bad for U.S. companies importing the wood, bad for the construction sector there and bad for people buying homes,” ApexBrasil President Laudemir Müller said. “In other words, it will also have an impact on U.S. inflation.”

On Wednesday, July 15, the Office of the U.S. Trade Representative, or USTR, confirmed an additional 25% tariff on a selection of Brazilian goods, citing what it described as unfair Brazilian trade practices.

The Brazilian government rejects the grounds given for the measure. The new duties are scheduled to take effect on July 22 and are expected to cover 19.2% of Brazil’s total exports to the United States.

Granite exports also exposed

Wood is not the only Brazilian building material affected. The United States is also a major buyer of Brazilian granite, which was included in the latest tariff package.

ApexBrasil data show that Brazil supplies 36% of U.S. granite imports. The material is widely used by the construction industry.

“U.S. buyers cannot suddenly replace Brazil when the country supplies 30% of the wood used in construction,” Müller said. “The same applies to granite when 36% of supply depends on Brazil.”

Source: Agência Brasil

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