Brazil’s Drop in Key Exports to the United States: What Happened and Why It Matters

Official figures from Brazil’s Ministry of Development, Industry, Trade and Services reveal a new strain in the US-Brazil trade relationship.

In May 2025, Brazil’s exports to the United States totaled $3.61 billion, an 11.5% increase from the previous year.

But this headline masks a sharp decline in some of Brazil’s most important exports to the US.

Brazilian sales of cellulose to the US dropped by 35%, and fuel oils fell by more than half. Aircraft exports shrank 7.3%, engineering equipment fell 30.9%, and pig iron slipped 1.2%.

These are the first significant drops in these categories in several years, and they come as the US government, under President Donald Trump, imposed new tariffs—10% on most Brazilian goods, and up to 50% on steel and aluminum.

These tariffs are designed to protect US industries, but they make it much harder for Brazilian companies to compete.

At the same time, US demand for some products, like fuel oils, has fallen, and Canada has gained an edge in cellulose because it benefits from preferential access to the US market under the United States-Mexico-Canada Agreement (USMCA).

A new tension has emerged as President Lula has taken a notably confrontational stance toward Trump and his administration.

Lula has publicly criticized Trump’s tariff policies, calling them harmful to global economic stability and vowing to defend Brazil’s interests through legal and financial countermeasures.

He has stated that if the US imposes tariffs on Brazilian goods, Brazil will respond in kind, emphasizing that mutual respect must guide the relationship.

Lula’s government has also signaled closer ties with other BRICS countries and has positioned Brazil as a voice for multipolar diplomacy.

This approach, while asserting Brazil’s autonomy, risks provoking further US trade penalties and could make negotiations more difficult for Brazilian exporters in the future

Brazil’s Drop in Key Exports to the United States: What Happened and Why It Matters

Despite the overall growth in exports, which is mainly due to gains in agricultural products, the decline in industrial goods signals a real shift.

Over half of Brazilian manufacturers now say US trade barriers are hurting or will hurt their business.

The last time Brazil saw a similar drop in exports to the US was during the 2020 pandemic, when global demand collapsed. This time, the cause is not a worldwide crisis but new US trade policies.

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The United States remains Brazil’s second-biggest trading partner, but the numbers show the relationship is changing.

For the first time in years, the impact of tariffs and shifting US demand is visible in the trade data, not just in political speeches. This matters because trade supports jobs and investment in both countries.

When the numbers fall, people feel it. The cracks in the relationship are now clear, and they have real economic consequences.