Impact of Trump’s tariff on Brazil will be much lower than expected

The additional 50% tariff that the United States will impose on Brazilian imports starting Aug. 6 will only affect 35.9% of sales, meaning it will have a much lower impact than initially expected.

Thanks to the nearly 700 exceptions that the US included in the tariff increase announcement, Goldman Sachs estimates the impact will be limited to 0.15 percentage points of Brazil’s gross domestic product.

The list of exceptions announced Wednesday includes several of Brazil’s main exports to the United States, such as oil, fuels, cellulose, airplanes, minerals, and orange juice.

However, some products in Brazil will still be subject to the tariff, including coffee, meats, and fruits.

According to Brazilian Vice President Geraldo Alckmin’s calculations, the additional tariff will affect only 35.9% of the country’s sales to the United States.

Last year, these sales added up to 40 billion dollars, 12% of the country’s total exports.

The exceptions exclude 45% of Brazil’s exports to the US from the sanctions.

Another 20% pertains to sales of steel, aluminum, automobiles, and automobile parts, subject to special regimes, 50% on steel and aluminum, and 25% on the automotive sector worldwide.

Alckmin stated that Brazil will continue negotiating to reduce the 35.9% of exports affected and to benefit other products.

“We do not consider the matter concluded. The toughest negotiations begin now,” he said on a television program.

He believes that it is also in the United States’ interest to continue negotiating to prevent its consumers from paying more for products such as coffee and beef, for which Brazil is the world’s leading supplier.

On Tuesday, US Commerce Secretary Howard Lutnick himself admitted to adopting tariff preferences for products that are not grown in the United States, such as coffee, cocoa, and mango.

Brazilian Finance Minister Fernando Haddad was also optimistic. He said that Brazil was “at a more favorable starting point for new negotiations than expected,” but still “far from the arrival point.”

Given the measures announced by the Brazilian government to find new markets for affected products such as fish, beef, honey, and fruits, the experts also revised the most pessimistic forecasts.

Tariff exceptions

Among the exceptions, oil and its derivatives stand out, which last year, they represented 19% of Brasil’s exports to the United States, amounting to 7.96 billion dollars.

Other notable exceptions include airplanes and aeronautical parts (2.7 billion dollars, or 6% of the total), cellulose (1.69 billion dollars), and orange juice (1.3 billion dollars).

These four products alone accounted for 32% of all Brazilian exports to the United States.

Thanks to the exceptions, the effective average U.S. tariff on Brazilian products will be 30.8% after the sanctions, which is below the initial forecast of 36.8%, according to revised calculations by Goldman Sachs.

Brazil hopes to initiate negotiations to benefit products such as beef, whose exports to the United States totaled 1.6 billion dollars last year, as well as coffee, fruits, textiles, and footwear.

Brazil, the world’s leading coffee producer and exporter, exported 8.1 million bags of coffee to the United States in 2024. This represented 16% of Brazil’s total grain exports, a third of the US coffee market.