Tariff Hike Could Reduce Brazil’s GDP by 0.41%

The 50% tariff imposed by the United States on Brazilian products has a direct impact on exports. It could lead to a reduction of up to 0.41% in Brazil’s Gross Domestic Product (GDP), according to estimates from the Agribusiness Study Center at Fundação Getulio Vargas (FGV Agro).

In a technical note, researchers Angelo Gurgel, Cícero Lima, and Leonardo Munhoz estimate that the additional tariff could result in a 75% drop in agribusiness exports to the U.S. (equivalent to USD 9 billion), as Brazilian products would become significantly more expensive than international competitors.

The tariff hike increases consumer prices and could reduce consumption, the researchers explain. About 30% of Brazil’s exports to the U.S. come from the agribusiness sector—totaling USD 12.1 billion—with key products including green coffee, wood pulp, and beef. The researchers note that some products already face high U.S. tariffs, such as orange juice (10.94%) and sugar (19.79%).

The United States accounts for 2.5% of Brazil’s agricultural imports, totaling USD 1 billion, mainly concentrated in inputs such as seeds, lactalbumin, enzymes, and animal feed.

Source: Globo Rural

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