Tariffs: Exceptions Reduce Impact on GDP and Maintain Industry Concern

The United States' tariff hike against Brazil is not a closed chapter yet. The exceptions announced by President Donald Trump on Wednesday (30) eased the burden on some Brazilian exporters, but uncertainties that go beyond the macroeconomy are still being discussed.

Previously, with only the expectation that the US would tax Brazilian products by 50%, estimates for losses in Brazilian GDP (Gross Domestic Product) were around 0.3 percentage points.

Now, the forecasts are more optimistic, hovering around 0.15 points, as XP indicates in its monthly Raio-XP report. Banco Daycoval has a slightly better estimate, at 0.13 points ; while Fiesp (Federation of Industries of the State of São Paulo) projects a loss of 0.2 points.

Additionally, with the exceptions promoted by Trump, XP's economic analysts found that the effective tax rate applied by the US on Brazil—the average of the rates that are actually applied to our products—has fallen to around 30%.

"Even before the exceptions, I imagined the impact would be relatively small overall. But yes, the exceptions provide relief. Almost 700 products were spared, almost half of exports. That's no small benefit," notes Sergio Vale, chief economist at MB Associados.

The surcharge on Brazilian products is scheduled to come into effect next Wednesday (6) . However, products such as steel, orange juice, aircraft and their parts and even Brazilian nuts will be spared the 40 additional tariff points , remaining with a base rate of 10%.

Estimates indicate that just over 40% of shipments from Brazil to North Americans were charged less .

"Many people will still be hit hard, but for these sectors that remain at 10%, this is nothing that will make the business unviable," emphasizes Gustavo Cruz, chief strategist at RB Investimentos.

Important items on Brazil's export agenda to the US, such as coffee and meat, were not spared .

The search for what to do with these products is one of the uncertainties that still hangs in the air. In the case of these foods, however, Vale notes the possibility of them being redirected for domestic consumption , which, "initially, ends up helping Brazilian inflation."

The logic is simple: the supply of products increases and prices cannot remain so high.

Unviability

Mangoes, açaí, and fish are some of the products that Cruz points to a possible halt in shipments to the US.

The RB strategist emphasizes that the impact is "more regional than national, with some regions accustomed to exporting to the Americans being affected."

For meat and coffee producers, there's still some hope, analysts say. Livestock farmers should be able to sell their products domestically, while coffee growers may still be completely exempt .

U.S. Commerce Secretary Howard Lutnick acknowledged that the White House may reconsider exempting goods unable to grow on U.S. soil from tariffs , citing grain, which is widely consumed in the U.S., by name.

For those who "have no way out," Vale emphasizes, it's industry. Brazil has a broader value-added agenda than the US, an agenda that tends to struggle more to find alternatives.

"Agriculture can flow to China, but industry tends to suffer more intensely. Exporting to other locations is more difficult, and there's no way for this industry to flow to Brazil. The tendency is for production to decline initially," says the economist.

However, he emphasizes that there is still a lot to be done and to be followed over the coming months.

Beyond the macro: business and market uncertainties

As a result of the tariff hike, XP's sentiment index fell from slightly optimistic (76 points, on a scale of 100) to neutral (37), approaching the pessimistic level.

"While the direct impact of tariffs is limited, there are still broader effects that could come through investor flows and the political channel," the report states.

Analysts at the investment firm point out that tariffs weighed on the market in July — a month in which the Ibovespa index accumulated a 4% drop — and observed a "rotation movement on the stock exchange, from domestic cyclical sectors to commodity sectors, as investors sought protection against higher interest rates and a weaker real."

Tânia Gofredo, chief economist at GEP Brasil, compares the current scenario to the post-pandemic one, pointing to the period's "more pronounced and often unpredictable volatility." However, she assesses that "with the tariff hike measures, this characteristic is even more intense" today.

"Therefore, planning must be focused on 'windows of opportunity' to trade in times of lower volatility, inventories must be strategic, and scenario monitoring must be done in a shorter period of time to mitigate risks and take advantage of opportunities," he points out.

But despite the short-term volatility, XP considers that "the medium- and long-term outlook for Brazilian stocks remains attractive," highlighting that "Brazil has benefited from a global capital rotation out of the US amid rising trade tensions."

While the tariff hike scared away some investors, the weaker dollar helped maintain the flow of foreign capital into the country, registering R$25.2 billion in net inflows of foreign capital into shares, according to the investment firm.

"Furthermore, Brazil's status as a commodity superpower—with leading global positions in food (soybeans, beef, poultry, coffee) and energy (iron ore, oil)—provides inherent food and energy security, sustains trade surpluses, attracts foreign exchange inflows, and anchors long-term investments in infrastructure and logistics," the report concludes.

With information from Estadão Conteúdo