U.S. Tariff Plan Could Cost Brazilian Agribusiness Nearly $6 Billion

Brazil’s agribusiness could lose up to $5.8 billion in exports due to the new tariffs proposed by the United States government, warns the Brazilian Confederation of Agriculture and Livestock (CNA).

The proposed tariffs, ranging from 15% to 50%, could cause Brazilian agro exports to the U.S. to fall by almost half. In 2024, Brazil exported agricultural products worth $12.1 billion to the U.S.

With the new tariffs potentially raising import costs by up to 50%, CNA projects a 48% drop in total exports. The analysis is based on import elasticity, which measures how sensitive U.S. demand is to price increases.

The higher costs are expected to be fully passed onto American consumers, significantly reducing competitiveness. The impact will vary across products.

Orange juice, currently facing tariffs of about 6%, could see its tariff rise above 55%, effectively eliminating its exports to the U.S.

Similar scenarios are predicted for specialty sugars and industrial ethanol, with projected export reductions of nearly 100% and 71%, respectively.

Proposed Tariffs Threaten Brazil’s Agro Exports

For green coffee, one of Brazil’s primary exports, the impact is less severe, estimated at a 25% reduction despite a tariff hike to 50%. The limited global coffee supply helps cushion the blow.

Other products, including beef (33% decrease), animal fats (50%), industrial wood products (up to 100% in some cases), and cellulose pulp (25%), will also suffer significantly.

The CNA emphasizes that these tariffs pose a substantial threat to Brazil’s agricultural competitiveness in the global market. Given the high sensitivity of most Brazilian agro products to price changes, the tariffs risk excluding Brazil from one of its key export destinations.

The organization recommends seeking alternative markets and pursuing bilateral agreements to mitigate potential losses. The proposed tariff measures remain subject to formal approval and could still undergo changes.

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