Coffee and Iron Ore Escape the New 25% US Tariff on Brazil
Brazil · Trade
Key Facts
—Sectors spared Coffee, beef, iron ore, aircraft parts and pharma inputs are among over 2,000 categories excluded from the US tariff, safeguarding top export earners.
—Sectors exposed Footwear, textiles, seafood, sugar, ethanol and pig iron remain subject to the 25% levy, threatening industrial exporters that rely on US demand.
—Industry alarm Fiesp and CNI warn the tariff directly harms Brazilian competitiveness and hurts companies in both countries, especially in higher-value-added goods.
—Negotiation path Brazil’s trade minister says the government will pursue a negotiated deal if the tariff proceeds, signaling diplomacy over immediate retaliation.
—Investor impact The split between exempted commodities and exposed manufactured goods creates a clear divergence in equity risk, margin pressure and supply-chain continuity.
More than 2,000 categories of Brazilian goods are exempted from the new 25% US tariff, shielding flagship exports such as coffee, beef and iron ore while leaving industrial sectors including footwear, textiles and ethanol fully exposed to the levy.
What the US tariff spares
The exemption list covers more than 1,600 product categories and protects a large share of Brazil’s exports to the United States by value. Confirmed spared sectors include coffee, beef and other meats, iron ore and other metals, pharmaceutical compounds, aircraft and aerospace parts, crude oil, rare earths, fertilizers, organic chemicals, fruits and nuts, and wood pulp. Aircraft and aircraft parts are explicitly carved out, preserving a high-value bilateral trade flow.
Which sectors remain exposed
The blanket 25% tariff applies hardest to goods left outside the exemption shields, according to trade-analysis data. Brazilian officials have named seafood, ornamental stone, timber, textiles and footwear as the most exposed sectors. Reuters and official commentary confirm the levy threatens footwear, fishing and seafood, timber and wood products, textiles, sugar, pig iron, wood moldings and ethyl alcohol, commonly marketed as ethanol.
Live Market IntelligenceBrazil — Live Market Board
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Brazil — Live Market Board
+0.30%
175,664.62
+0.30%
65,484.32
-0.53%
11,445.90
-0.22%
2,979,472
-0.72%
2,457.87
-1.28%
60,779.49
-1.40%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 175,664.62 | +0.30% | +21.85% | 175,135.41 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
Industry warns of lost competitiveness
The Federation of Industries of São Paulo (Fiesp) said the proposed US tariff creates risks for Brazilian exports and directly harms competitiveness. The Brazilian National Confederation of Industry (CNI) told Reuters the tariff increase affects products where Brazil is a leading supplier to the US, including pig iron, wood moldings, cane sugar, ethanol and tobacco, and cautioned that the measure “harms companies in both countries.”
Why this matters for investors and expats
The exemption split creates a two-speed trade reality: companies exporting exempted commodities face little direct tariff disruption, while firms in exposed industrial sectors must price in higher costs, possible margin compression and supply-chain reorganization. For investors holding Brazilian equities or bonds tied to textile, footwear, sugar-ethanol or pig-iron producers, the risk of earnings downgrades and contract losses has risen materially.
Brazil pushes for negotiation
Brazil’s trade minister said the government will seek a negotiated deal if the US imposes the tariff, signaling a preference for diplomacy over immediate retaliation. Brasília views the exemption list as evidence that Washington recognizes the importance of Brazilian commodity flows to US industry, and it hopes to expand that logic to more exposed sectors.
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Frequently Asked Questions
Which Brazilian exports are exempt from the new 25% US tariff?
Coffee, beef and other meats, iron ore, pharmaceutical inputs, aircraft and aircraft parts, crude oil, rare earths, fertilizers, organic chemicals, fruits and nuts and wood pulp are among the more than 1,600 product categories spared.
Which Brazilian products still face the 25% US tariff?
Footwear, textiles, apparel, seafood, timber and wood products, sugar, ethanol, pig iron and many machinery items are not exempt and remain fully subject to the levy.
How is Brazilian industry reacting to the US tariff proposal?
Fiesp says it harms export competitiveness, while CNI warns it affects products where Brazil is a top US supplier and damages firms in both countries. The government says it will seek a negotiated deal.
Sources: Reuters: Trump administration proposes 25% tariff to punish Brazil over trade practices, Agência Brasil: US government proposes new 25% tariff on Brazilian products, Global Trade Alert: Brazil Section 301 Proposed Tariff, Valor International: Brazil will seek negotiated deal if US imposes 25% tariff, TariffLens: Section 301 Brazil Tariffs, Fastmarkets: Potential impacts of US Section 301 tariffs on Brazil
This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error
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