Industrial and agricultural federations measure the impact of Trump's "tariff hike" and demand negotiations

After U.S. President Donald Trump imposed a 50% tariff on Brazilian imports, industrial federations expressed concern about the impact of the "tariff hike" on Brazilian states. The Republican's measure is a consequence of actions taken by the Lula administration and the Supreme Federal Court (STF) and could harm various sectors of national industry and agribusiness.

"The US surcharge on Brazilian exports, especially agricultural products, is a warning sign [...] This measure could harm our producers and jeopardize Brazil's presence in the international market. The government must act firmly to protect agriculture and ensure the sector's security," said Ágide Eduardo Perin Meneguette, interim president of the Paraná State Agriculture Federation (FAEP) .

The National Confederation of Industry (CNI) emphasized the need for the Brazilian government to adopt a diplomatic stance in negotiations with the Republican administration in the White House. "The priority should be to intensify negotiations with the Donald Trump administration to preserve the historic and complementary trade relationship between the countries," the organization stated.

In turn, the Federation of Industries of Santa Catarina (Fiesc) emphasizes the importance of "maintaining negotiation channels through Brazilian diplomacy." For the organization, a worsening of the situation could result in the "cancellation of investments in Brazil." The statement urges the government to work calmly toward the best solution and "consider the interests" of the country.

Fiesc suggests what should be evaluated in a possible decision by the Lula government: "The decision needs to be evaluated under three aspects: from an economic point of view, there is no justification for applying this tax, since the United States has registered a surplus in its trade balance with Brazil for decades; the second aspect concerns domestic policies, Brazil is a sovereign country and its decisions, right or wrong, must be respected; finally, instead of adopting a neutral stance in relation to international diplomacy, Brazil repeatedly assumes positions of misalignment with the United States."

Sectors demonstrate concern about company profitability and job preservation

The new tariff could also change the scenario for the production of high-value-added materials, such as the plastics industry, which accounts for 95% of all Brazilian production and is tied to other markets. "It is an essential component of food packaging, automotive components, fertilizers, irrigation systems, greenhouses, and logistics. In other words, in addition to the direct export of plastic products, such as films and technical packaging, our sector will be indirectly affected by the decline in other export sectors," says José Ricardo Roriz, chairman of the board of the Brazilian Plastics Industry Association .

He points out that a 50% tariff "makes it practically unfeasible" for Brazilian companies to invest in exports to the United States, impacting revenue, profitability, and quality jobs.

In addition to the agricultural and plastics sectors, the Federation of Industries of the State of Rio de Janeiro (Firjan) expressed "great concern" about the new taxes, effective August 1st. "This package of measures follows the application of import tariffs of 25% on steel products and 10% on aluminum products from countries including Brazil, announced by the US government in March of this year."

According to Firjan, the United States is the country's largest foreign investor in the Brazilian market, making it its second-largest partner in domestic goods trade. "The United States recorded a trade surplus of US$7 billion with Brazil in 2024," Firjan notes.

Brazil and the United States have maintained economic ties since the late 19th century, when Brazilian coffee became one of the main products imported by Americans. Throughout the 20th century, the relationship deepened, with investments in infrastructure, energy, and industry. Currently, the United States ranks as the second-largest destination for Brazilian exports and is also the country's largest foreign investor.

In 2024, according to US government data, the US imported approximately US$42 billion worth of Brazilian products, while Brazil purchased US$44 billion worth of US products. This historical and strategic interdependence means that unilateral tariff measures have a direct impact on the trade balance and the stability of various national production sectors.

Reciprocity Law could be used as a reaction to Trump's new tariff

In a statement, President Lula mentions the commercial sector only in the last paragraph and points out that “any measure to unilaterally raise tariffs will be responded to in light of the Brazilian law of Economic Reciprocity.”

Published in May of this year, the aforementioned legislation was sanctioned without vetoes by the president, as a "strategic action" by Brazil in the face of the tariff measures imposed during Donald Trump's second term.

The law authorizes the Executive Branch to adopt countermeasures in the form of "restrictions on imports of goods and services or measures to suspend commercial concessions, investment and obligations related to intellectual property rights and measures to suspend other obligations provided for in any trade agreement of the country."

With such measures, the feeling of uncertainty for exporters and investors may be increased, after all, the application of the legislation could trigger new trade frictions between the two countries.