U.S. Tariffs Threaten 2.7% of São Paulo’s Economy, Brazil’s Powerhouse Under Siege
Brazil’s main economic state, São Paulo, now faces a major threat. The United States is about to set a 50% tax on all Brazilian exports, starting August 1, 2025.
Official state data says this move could shrink São Paulo’s economy by up to 2.7%. That means as many as 120,000 people could lose their jobs, and up to R$7 ($1.3) billion in wages could vanish.
The biggest casualties are the major industries that rely on exports to the U.S. São Paulo’s world-class aircraft maker, Embraer, sells nearly half its planes to the U.S. With the new tariff, each jet will cost $9 million more for American buyers.
Embraer warns that, by 2030, the losses could reach $3.6 billion, a hit reminiscent of the worst days during the COVID-19 crisis, when layoffs were common and revenue collapsed.
Heavy machinery makers like Caterpillar, with major operations in the state, also face trouble.
The extra cost may push companies like this to move factories to other countries. That puts more local jobs in danger.
São Paulo’s famous farmers aren’t spared, either. Brazil sends 80% of America’s imported orange juice.
U.S. Tariffs Threaten 2.7% of São Paulo’s Economy, Brazil’s Powerhouse Under Siege
Orange prices in São Paulo have dropped sharply since the tariff announcement. Some growers may let crops rot, as the costs will now outweigh profits.
Losing the U.S. market could cost over $1.3 billion in yearly orange juice sales alone. Brazilian officials say the tariffs are connected to recent political disputes, not just trade.
To limit the damage, São Paulo began emergency loan programs and is urging American lawmakers to reconsider.
If these tariffs take effect, pain will not stay on one side. U.S. companies that use Brazilian goods will pay more, and American shoppers could soon see higher prices for everyday products.
Official data and state reports form the basis of all facts and figures above. The coming months will reveal how deep these new trade barriers will cut, but both economies stand to lose if the deal goes ahead.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief