U.S. tariff hike threatens start of tobacco harvest and millions in exports from Rio Grande do Sul

While producers in Rio Grande do Sul begin harvesting tobacco with good expectations for the crop, the sector is facing a challenge that may compromise results: the 50% tariff imposed by the United States on Brazilian products.

The measure is already directly affecting one of the main tobacco markets in Rio Grande do Sul and has raised concerns among farmers and industry representatives.

The import tariffs, announced by U.S. President Donald Trump, took effect at the beginning of August. With them, the country began applying the highest average taxes on foreign products in more than 100 years, affecting dozens of nations.

Brazil’s national production last year was 719 thousand tonnes, with 303 thousand coming from Rio Grande do Sul alone, representing 42% of the country’s total. With favorable weather, expectations are for strong performance to be repeated in 2025.

However, the international scenario is concerning, since in 2024 the United States was the third-largest buyer of tobacco produced in the state, purchasing around 38.4 thousand tonnes and generating more than USD 245 million.

This year, before the tariff hike took effect, about 70% of the tobacco destined for the U.S. had already been shipped. With the new tax, part of the shipments were suspended: around 12 thousand tonnes that had already been sold never left the factories.

“What we historically export to the United States is around 9% of the volume,” says Valmor Thesing, president of Sinditabaco. “If the tariff increase remains in place, the companies associated with the tobacco union will face the challenge of trying to redirect these volumes to other markets,” he explains.

According to him, some shipments have resumed recently, but they still account for only a small portion of what remains stalled.

In the southern part of the state, in municipalities such as Canguçu, more than five thousand families depend on tobacco production.

“The crop overall seems to be much better, really good. Producers are concerned about the tariff impacting commercialization as well — which can be a major problem for us here,” says producer Nilton Pereira.

In addition to the immediate impact on exports, there is fear that the prices paid to producers could be affected. Marcílio Drescher, president of Afubra, highlights that burley tobacco (widely consumed by Americans) could be hit the hardest.

“If the U.S. tariff hike remains in effect, in the future this will have an impact, but mainly on producers of burley tobacco, which is the barn-cured tobacco,” comments Drescher.

Source: G1

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