Trump tariff hits heart of Brazilian agribusiness

The United States’ sweeping tariff hike against Brazil has hit the country’s agribusiness sector hard, according to executives and industry leaders. Few agricultural products were included in the list of exemptions from the 50% tariff that will apply to goods entering the U.S. as of August 6. Only orange juice, nuts, and pulp are exempt; coffee, fish, and beef will be affected.

Amid mounting pressure, exporters have already requested government support through financing lines. On Wednesday, Vice President Geraldo Alckmin informed Roberto Perosa, president of the Brazilian Association of Meat Exporting Industries (Abiec), that the government is considering establishing a credit line for exporters.

In 2024, the U.S. was the destination for US$12 billion in Brazilian agricultural exports—7.3% of all sector exports—making it Brazil’s third-largest agribusiness trading partner after China and the European Union. The top exported products to the U.S. were forestry products (US$3.7 billion), coffee (US$2.1 billion), meat (US$1.4 billion), and juices (US$1.2 billion).

“Agribusiness, except for orange juice and nuts, was hit right in the heart. Government aid through subsidized credit lines and measures to mitigate this moment is imperative,” said Eduardo Lobo, president of the Brazilian Association of Fish Industries (Abipesca).

The fish sector, which exported US$224.3 million to the U.S. last year, was among the first to request government assistance—R$900 million in working capital. Abipesca warns of a sector “collapse” if the federal government does not step in.

According to the association, fish companies have “no viable alternative markets,” as the supply chain is heavily dependent on the U.S. “This reality is even more acute in states like Ceará, where companies are directly tied to this trade flow,” said a statement.

“The interruption of these exports could trigger a wave of bankruptcy protection filings, as companies will be unable to meet their financial obligations,” the association added, estimating that over 1 million fishers could be affected.

The beef sector has also expressed concern. “The U.S. is our second-largest market, and this tariff makes beef exports to the U.S. unfeasible,” Perosa told reporters. “We’re still expecting a US$1 billion impact. We had anticipated exporting 400,000 tonnes [this year], but that won’t happen under this tariff.”

Paulo Mustefaga, president of the Brazilian Association of Meatpackers (Abrafrigo), echoed the pessimism. “This escalation of actions that harm Brazil’s economy is extremely worrying for the productive sector and all of Brazilian society,” he said. Abrafrigo estimates beef export losses of US$1.3 billion in 2025 and up to US$3 billion in the following year.

Trump disregarded arguments from the Meat Importers Council of America (MICA), which stated that Brazilian beef complements local production and is a key ingredient in the manufacture of hamburgers.

The omission of coffee from the exemption list also surprised analysts, especially after U.S. Commerce Secretary Howard Lutnick had previously suggested that coffee might be exempt, given that the U.S. does not produce it.

“We’re going through a moment of anxiety because Brazil supplies one-third of the coffee consumed in the U.S. The question is: what other origin will step in, and will Americans go without Brazilian coffee?” said Marcus Magalhães, founder of the MM Café consultancy.

Marcos Matos, director of Brazil’s Coffee Exporters Council (Cecafé), said Lutnick’s comments should encourage renegotiations, even if exemptions aren’t automatic and depend on bilateral relations. “The imposition of the tariff, which was already the more likely scenario, doesn’t rule out negotiations. In previous cases, several countries were taxed but later negotiated other terms.”

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

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

Source: DataLiner (Click here to request a demo)

The tariff hike will also have a “major impact on the sugarcane and ethanol sector in the Northeast,” said Renato Cunha, president of NovaBio and the Pernambuco Sugar and Alcohol Industry Syndicate (Sindaçúcar/PE).

Northeast sugar mills previously benefited from a U.S. import quota exempt from tariffs, allowing them to sell sugar at a higher price than in global markets. The quota was small—180,000 tonnes annually—compared to the region’s output of 3.6 million tonnes.

With the new tariffs, “we can still perform, but it becomes a smaller export operation in an already modest volume,” Cunha said.

Sectors hope their products will eventually be added to the exemption list. Organic sugar producers are among them. According to Leontino Balbo, owner of Native, no other country can replace Brazil in the short term due to a lack of USDA certification.

One of the few sectors exempted from the surcharge, the orange juice industry welcomed the news. According to Ibiapaba Netto, president of CitrusBR, which represents major juice producers, U.S. bottling companies demonstrated to the U.S. government how tariffs would affect jobs and the economy—and explained why an exemption was necessary.

Fonte: Globo Rural

Image generated by Artificial Intelligence

Sharing is caring!