Trump hits Brazil with 50% tariffs, excludes aircraft, orange juice, energy

Straits Times

2 days ago

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The US softened the trade blow to Brazil by excluding sectors such as aircraft, energy and orange juice.
WASHINGTON - US President Donald Trump on July 30 slapped a 50 per cent tariff on most Brazilian goods to fight what he has called a 'witch hunt' against former President Jair Bolsonaro, but softened the blow by excluding sectors such as aircraft, energy and orange juice.
That came as a relief for many in Brasilia, who since Mr Trump announced the tariff had been urging protections for major exporters caught in the crossfire. Shares of planemaker Embraer and pulpmaker Suzano rose.
'We're not facing the worst-case scenario,' Brazilian Treasury Secretary Rogerio Ceron told reporters. 'It's a more benign outcome than it could have been.'
In a factsheet about Mr Trump's executive order on July 30, the White House tied the tariffs to Brazil's prosecution of Mr Bolsonaro, who is standing trial on charges of plotting a coup to overturn his 2022 electoral loss.
The executive order came as the US also announced sanctions on a Brazilian Supreme Court justice overseeing Mr Bolsonaro's trial, accusing the judge of authorising arbitrary pre-trial detentions and suppressing freedom of expression.
Still, Mr Trump's executive order formalising a 50 per cent tariff excluded dozens of key Brazilian exports to the United States, including civil aircraft, pig iron, precious metals, wood pulp, energy and fertilisers.
Among the top concerns in the government of President Luiz Inacio Lula da Silva were aircraft produced by Embraer, which exports 45 per cent of its commercial aircraft and 70 per cent of its executive jets to the United States.
Analysts had also warned of a serious potential impact on Suzano, one the world's largest wood pulp producers.
Embraer shares rose 11 per cent in Sao Paulo and Suzano gained over 1 per cent in afternoon trading.
Former Brazilian trade secretary Welber Barral warned it was too soon to celebrate, however. He estimated that the list of Brazilian products exported to the US comprises approximately 3,000 items, and only a fraction of these received exclusions.
'There will be an impact,' he said of the tariffs.
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The July 30 executive order did not include exemptions for beef or coffee, two key exports to the United States, he noted.
Brazilian meatpacking lobby Abiec, which represents beef producers including JBS and Marfrig, did not immediately comment on the July 30 executive order.
On July 29, the group said the new tariffs would make sales to the US "inviable."
Despite language exempting 'energy and energy products' from the tariffs, energy companies operating in Brazil suspended oil shipments to the United States, citing uncertainty, industry group IBP told Reuters. REUTERS