Businesspeople want Lula to negotiate with the US given the risk of losing US$23 billion by 2026.

The potential loss of US$23 billion in business with the United States — the second-largest destination for Brazilian exports — by 2026 is leading business leaders to pressure the government of Luiz Inácio Lula da Silva (Workers' Party) to seek diplomatic negotiations to reverse Trump's tariff hike, announced on Wednesday (9). But they are expected to face reluctance from the Workers' Party leader, who intends to apply the Economic Reciprocity Law .
The 50% surcharge on all products imported from Brazil starting August 1 could reduce the country's exports by about US$6.5 billion this year and another US$16.5 billion in 2026, totaling US$23 billion in losses by the end of next year, according to calculations by XP Investimentos.
Exporters of higher value-added products are likely to feel the negative effects of the measure more than the agricultural sector, which is less dependent on the North American market.
"Steel, mining, automotive, aeronautics, and oil are among the most affected sectors, due to their high dependence on the North American market," says Jackson Campos, director of institutional relations at AGL Cargo and a foreign trade specialist.
"Even sectors such as pharmaceuticals, textiles, footwear, and food face risks, as the measure is broad and affects all exports. The decision raises costs, reduces competitiveness, and creates trade uncertainty. Brazilian businesses will need to diversify markets, seek more robust bilateral agreements, and adopt risk mitigation strategies to face the new, more protectionist geopolitical and trade scenario," says the executive.
Trump's tariff hike left exporters surprisedTrump's tariff hike caught many sectors by surprise. One of the most concerned is the oil and petroleum products industry. The commodity is the main export product to the world's largest economy.
The Brazilian Oil and Gas Institute (IBP), the sector's representative body, advocates for open dialogue between Brazilian and North American leaders to find a diplomatic solution and preserve trade flows between the continent's two largest economies.
The manufacturing industry also fears the negative effects of the new tariff. The US is the sector's main foreign market. "There is no economic fact that justifies a measure of this magnitude, raising tariffs on Brazil from floor to ceiling. The impacts of these tariffs could be serious for our industry, which is highly interconnected to the American production system," says Ricardo Alban, president of the trade association.
According to him, a breakdown in this relationship would be very damaging to the Brazilian economy. "Therefore, for the productive sector, the most important thing now is to intensify negotiations and dialogue to reverse this decision," he says.
The same concern applies to the plastics industry. José Ricardo Roriz, chairman of the board of the Brazilian Plastics Industry Association (Abiplast), says that exporting to the United States means competing at a high level and accessing one of the most demanding and well-paying markets in the world.
"These are companies that invest in technology, quality, and that support better-paying jobs. A 50% tariff makes this type of operation practically unfeasible, directly affecting the revenue, profitability, and quality jobs of these companies," he states.
Indirect effects may also be felt, as plastic is present in 95% of Brazilian exported products, including packaging, automotive components, irrigation systems, greenhouses, and logistics. "It will also be affected by the decline in other export segments."
"In addition to the direct export of plastic products, such as films and technical packaging, our sector will be indirectly affected by the contraction of other export sectors," says the chairman of the Abiplast board.
The Brazilian Textile and Apparel Industry Association (Abit) also spoke out in support of dialogue and understanding between Brazil and the United States. "It is essential that diplomatic and institutional channels be mobilized to reestablish the environment of trust and predictability that has always characterized the bilateral relationship. Understanding is always the most constructive and lasting path," Abit said in a statement.
Agribusiness fears rising production costs with Trump's tariff hikeConcerns about Trump's tariff hike have also gripped Brazilian agribusiness, despite the United States not being a major customer. There's a risk of rising input costs and, consequently, inflation for consumers.
The Mato Grosso Soybean and Corn Producers Association (Aprosoja-MT) says that if the new tariff is actually implemented, there will be “profound effects on the fields and on the tables of Brazilians.”
"The US is a strategic partner for Brazil, especially in the agricultural sector. We export meat, coffee, orange juice, corn ethanol, and Embraer aircraft, which depend on American parts. The increase in meat exports directly influences soybean and corn consumption, as poultry fattening, nutritional supplementation with feed, and cattle confinement are increasingly used in Brazil," the entity's statement states.
"We import ready-to-use fuels from the US, such as diesel, gasoline, and naphtha, which are essential for agricultural production and the transportation of food from farms to distribution centers. An increase in the price of these inputs will increase production costs and could impact food prices, worsening inflation," the association emphasizes.
The entity also emphasizes that Brazil imports high-tech agricultural machinery and components such as chips, processors, and advanced systems, which are essential for the competitiveness of Brazilian agriculture. "Trade barriers can hinder this access and hinder innovation in the field."
With inflation rising, Aprosoja also warns of the risk of a further increase in the benchmark interest rate (Selic), further increasing the cost of rural credit, which is already among the most expensive in recent history. "This discourages producers, who are facing negative margins and one of the biggest crises in the sector in the last 20 years."
The president of the Brazilian Rural Society (SRB), Sérgio Bortolozzo, states that the decision is alarming and demands immediate action from the Brazilian government. "It's not good for Brazil, nor for the United States. We're in a comfortable position, as we're the country's main supplier of coffee and beef, but a well-coordinated agreement will be needed to reverse this," he says. The solution, he says, lies in diplomatic negotiations.
The interim president of the Paraná State Agriculture Federation (FAEP), Ágide Eduardo Perin Meneguette, also advocates for the government to act to ensure the sector's security. "The US surcharge on Brazilian exports is a warning sign [...] This measure could harm our producers and jeopardize Brazil's presence in the international market," he declared.
For Tirso Meirelles, president of the São Paulo State Agriculture and Livestock Federation (FAESP), the U.S. government's decision reflects a "lack of Brazilian diplomacy and strategic vision." He believes the Luiz Inácio Lula da Silva (Workers' Party) administration lacked agility in seeking dialogue with the Trump administration.
He emphasizes that Brazil needs to adopt a more active stance at the negotiating table, strengthening permanent channels of dialogue with the United States, as well as other partners, and using multilateral agreements and international forums as tools for pressure and advocacy.
Tariff hike could hinder the sale of industrialized productsAccording to XP's survey, a 10% increase in manufactured goods prices would reduce export volumes by approximately 20%. "Thus, with the recent announcement of a 50% increase in tariffs, manufactured goods sales to the US would be rendered unviable," the report states.
“On the other hand, exports of basic goods (commodities) are less price-sensitive and, more importantly, can be redirected to other markets,” the brokerage highlights.
Analysts estimate that higher tariffs could reduce Brazilian gross domestic product (GDP) growth by 0.3 percentage points in 2025 and 0.5 percentage points in 2026.
Marcos Hanna, an economist at Armada Asset Investimentos, states that the most direct impact of the new tax on the Brazilian market is mainly concentrated on steelmakers such as Gerdau, CSN and Usiminas, which already face higher tariffs, and large meat producers such as JBS and Marfrig, which derive more than half of their revenue from exports to the United States.
“Embraer will also feel the effects of the pricing due to the increase in costs and the inability to pass on the fare increase in full to its customers, squeezing its margin.”
"Other companies that tend to be negatively affected are companies with high production costs and debt costs in dollars, as there is pressure for the real to devalue in a scenario where the trade balance is shifting toward the US."
He emphasizes that the agricultural sector, despite its high share of Brazilian exports, has little dependence on the United States – around 6% of the total value exported lands in the United States.
"It is natural that there will be a redirection of exports, closer ties with other trading partners, and the transfer of tariffs to the price of exported products, so that the impacts on Brazilian companies are less pronounced," he emphasizes.
Danilo Igliori, chief economist at Nomad, says the current situation calls for caution, given the possibility of the new tariff being reduced or even suspended until August 1st. "This new strategy has everything to increase uncertainty about the economic outlook, with a consequent increase in market volatility," says Igliori.
According to him, given Trump's track record, analysts and economic agents will likely speculate about the credibility of these new measures. "Will this be for real this time, or is it just another ploy to encourage negotiations that have so far been limited to a few countries?" he asks.
The economist states that scenarios with rising inflation and loss of activity should return to the radar and the wait-and-see mode should remain activated for a while longer, the economist ponders.
Although Trump argued that the additional 50% tariff would be necessary to balance the trade balance between the United States and Brazil, the trade relationship between the countries has been a surplus for the Americans since 2009.
Last year, the United States sold US$283.85 million more than it imported from Brazil. In the first half of 2025, the trade balance between the two countries will be positive for the United States by US$1.67 billion, according to data from the Secretariat of Foreign Trade (Secex).
Brazil's top-selling product is crude oil: US$5.83 billion in exports to the US market in 2024. Next come semi-finished iron and steel products, aircraft, and coffee. Sales of chemical wood pulp, orange juice, and beef are also significant.
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