How might Trump's tariffs hurt Brazil?
Trump has not attempted to hide the political motivation behind the sanctions -- citing a judical "witch hunt" against his right-wing ally, ex-president Jair Bolsonaro.
The former artillery officer is on trial, accused of plotting a coup after losing re-election in 2022 to now-President Luiz Inacio Lula da Silva.
While Brazil's seasoned trade diplomats rush to avoid a damaging trade war that would hurt the country's already slow-growing economy, key sectors are bracing for impact.
Who will feel the pain?
Brazil is the world's largest exporter of beef, chicken, soybeans, corn, coffee, sugar and orange juice.
Its main exports to the United States are crude oil, semi-finished iron and steel products, coffee and aircraft.
The agriculture sector alone is projecting losses of $5.8 billion, according to the Confederation of Agriculture and Livestock.
Other sectors, such as aeronautics, fisheries and defense, allocate more than half of their exports to the US market and may suffer "an impact on jobs," according to economist Felipe Salto, former secretary of finance of Sao Paulo state.
In the aeronautics sector, the tariff hike is "almost an embargo" and may lead to a "workforce adjustment similar to the Covid-19 pandemic," according to Francisco Gomes Neto, CEO of Brazil's Embraer, the world's third-largest aircraft manufacturer.
- When will the impact be felt? -
Trump has become notorious for changing his mind on tariff rates, for stalling deadlines, and for claiming epic deals that fail to materialize. He may yet change his mind again.
But in Brazil, the impact of his threats is already being felt.
There is a preventive suspension of shipments of meat, fruit, fish, and grains, according to industry sources.
About 77,000 tons of fruit are sitting in containers awaiting a diplomatic resolution before they spoil, according to the Brazilian Association of Fruit Export Producers.
New shipments of beef to the United States are "under analysis" as they would only arrive after August 1, the powerful Brazilian Beef Association said.
Making a deal?
The political nature of the spat seems to make a last-minute deal less likely. Brazil has insisted the case against Bolsonaro will go ahead unless prosecutors decide otherwise.
Trump "doesn't want to talk," leftist Lula lamented recently, reiterating that his Plan A is to continue "negotiating."
Lula has tasked Vice President Geraldo Alckmin with reaching out to the White House.
But a Brazilian negotiating proposal sent in May has received no response, according to Brasilia.
Ricardo Alban, president of the National Confederation of Industry, believes Brazil will continue trying to negotiate as long as possible.
Its "largest bilateral trade relationship in manufactured products is with the United States," he said.
Damage control?
As a Plan B, Lula's government is already considering offering credit lines for tariff-hit companies.
In the longer term, Brazil is trying to "restructure" its trade ties with countries beyond the United States, top government official Rui Costa said recently.
The European Union, Mexico, and Canada are all potential partners.
When it comes to increasing exports to China, economists see a more difficult path for some sectors.
"It's easier to redirect oil or coffee production to other countries than aircraft parts," said Marcos Mendes of the Insper research center.
"Highly specialized sectors will suffer more," he explained.
Lula promised to apply "reciprocity" if Trump's tariff threat materializes, measures that could deepen the economic impact on both economies.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Euronews
an hour ago
- Euronews
Is wind power really a ‘con job'? Fact-checking Trump's latest claims
During a visit to Scotland this week, Donald Trump urged Europe to 'stop the windmills', branding wind energy as ineffective and harmful. Speaking to reporters at Prestwick Airport upon arriving in the country last Friday, he said, 'You see these windmills all over the place, ruining your beautiful fields and valleys and killing your birds, and if they're stuck in the ocean, ruining your oceans.' The US President then launched into a tirade about wind energy during a press conference on Sunday with European Commission President Ursula von der Leyen to announce a new trade deal, calling it a 'con job' that 'doesn't work'. Speaking at his Turnberry golf resort, he said wind turbines in Aberdeen were 'some of the ugliest windmills you've ever seen'. On Monday, during a press conference with UK Prime Minister Keir Starmer, Trump again attacked wind energy, calling turbines 'ugly monsters' and urging Starmer to instead back North Sea oil and gas. Trump's opposition is nothing new, and his war on wind energy began during a long-running battle with Scottish authorities over 11 wind turbines that can be seen from his Turnberry luxury golf resort. The legal challenge, launched in 2013, was ultimately dismissed by the UK Supreme Court in December 2015. His recent comments on wind energy add to a litany of complaints from the well-known climate change denier over the years, but how accurate are his claims about turbines? Are wind turbines the 'most expensive form of energy'? 'It is the worst form of energy, the most expensive form of energy, but windmills should not be allowed,' Trump claimed. A recent report on the costs of renewable energy from the International Renewable Energy Agency (IRENA) found that, globally, wind power is now 53 per cent cheaper than the lowest-cost fossil fuel alternative. Onshore wind was found to be the most affordable source of new power generation. As technology has advanced, supply chains have become more competitive and manufacturing has scaled up, the report explains, leading to a drop in prices. Onshore wind costs in particular have plummeted by 56 per cent since 2010. Trump may have been referring to the UK government increasing the maximum price it is prepared to guarantee companies generating electricity from new wind farms. Each year, companies that want to build renewable energy projects bid for government-backed contracts. Energy Secretary Ed Miliband has faced criticism for setting the maximum price for offshore wind at £113 (€130) per megawatt-hour (MWh) of energy - up from £102 (€118) in 2024 - at an upcoming auction of these contracts which opens in August. Currently, the wholesale gas price is £78 (€90) per MWh, but this frequently fluctuates, reaching over £170 (€196) per MWh during the 2022 price spike. The UK government has said that these prices don't represent a final amount, however, as companies will put in lower bids to win the auction. It claims that this auction will reveal the true price, referring back to last year, where prices cleared significantly lower than the maximum it set. Do wind turbines 'rust and rot' in eight years? Trump claimed that wind turbines 'start to rust and rot in eight years' and, when they do, 'you can't really turn them off, you can't burn them. They won't let you bury the propellers, the props, because there's a certain type of fibre that doesn't go well with the land.' IRENA cites the average lifespan of a wind turbine as around 20 and 25 years, not eight. Manufacturers say that some modern wind turbines in well-maintained locations can operate for 30 years or more. Scottish Power, for example, launched a repowering initiative in 2023 for Scotland's oldest onshore wind farm, which has been producing energy since 1998. Scientists from the EU's Joint Research Centre estimate that by 2050, the annual waste from wind turbines could be around 10 million tonnes. But around 80 to 95 per cent of their mass, including materials like steel, concrete and copper, can be recycled, according to industry groups like WindEurope. Recycling the propellers, or turbine blades, can be a bit trickier. Designed to be lightweight and durable, they are often made from fibreglass or carbon fibre held together with resin. This can be hard to separate, making recycling particularly difficult and expensive. Companies are working on solutions to the problem, however. In 2021, the European wind industry committed to reusing, recovering, or recycling 100 per cent of decommissioned blades and has called for a ban on sending them to landfills. Recycling technologies have significantly advanced since then, with new methods to break down this waste into usable components for products like cement additives. New blade designs are also incorporating more recyclable materials to make this process easier in the future. Reusing or upcycling blades is another alternative, with companies like Sweden's Vattenfall using them as part of a parking garage and Ireland's BladeBridge turning them into pedestrian bridges. Are 'almost all' wind turbines made in China? The US President claimed that 'they're made in China, almost all of them' and he isn't entirely wrong. China is currently the world's biggest manufacturer of wind turbines and their components. Around 60 per cent of global wind turbine production capacity is estimated to be in China, according to the Global Wind Energy Council. There are also significant manufacturing hubs elsewhere in the world with key producers in Germany, Spain, France and Denmark. Europe is thought to make up around 19 per cent of global manufacturing. As of 2024, around 90 per cent of commissioned wind projects in Europe used European-made wind turbines, according to a report from WindEurope. But with soaring demand for renewables, an ambitious EU clean energy target and much lower costs from Chinese manufacturers, countries are increasingly looking outside of Europe for their turbines. Are wind turbines 'killing birds'? Trump also claimed that wind turbines are harming wildlife, including whales and birds. He said they are driving whales 'loco' and killing them. Though a lot of whale behaviour is complex and not yet particularly well understood by scientists, the US National Oceanic and Atmospheric Administration says there is no evidence linking offshore wind turbines to whale deaths. Some activists have in the past suggested that building new wind farms, which involves techniques like surveying using acoustic waves, could impact whales. There is little evidence to suggest fatal impacts, however, and many countries have regulations in place to protect marine creatures during surveying for wind farm construction. Human interactions, such as ship strikes or entanglement in fishing gear, are much more likely to cause fatalities. Trump also said that wind farms 'kill the birds'. Wind turbines do cause bird fatalities, but only a fraction of the number killed by threats like cats, power lines, buildings or even climate change itself. Their impact can also vary depending on the time of year, place or local species of bird, with some wind farms killing large numbers of birds and others killing none. It is still a threat that needs to be taken seriously, and scientists are working on ways to avoid birds colliding with the turbines. Simple solutions being explored involve painting turbine blades in contrasting colours or patterns to make them more visible. More complex options could see AI tech used to shut down turbines when birds approach. Experts say location is probably the most important factor in determining how dangerous a wind farm could be to birds. Studying sites to determine their impact before building could dramatically reduce their impact. Did wind energy fail in Germany? 'The whole thing is a con job,' Trump said, adding that 'Germany tried it, and wind doesn't work.' Last year, wind power accounted for 28 per cent of Germany's electricity generation, making it the country's largest single source of electricity. Overall, renewable sources, including wind, solar, biomass and hydroelectric, made up nearly 60 per cent of its energy mix. During the first nine months of 2024, wind and solar generated more electricity than fossil fuels for the first time ever. The increase in renewables' share was driven by growth in wind and solar power. Wind alone was responsible for 31 per cent of the increase in Germany's renewable generation, according to think tank Ember.
France 24
an hour ago
- France 24
Could copper tariff hurt US more than Chile?
If not, the South American country should be able to easily find other buyers for a metal deemed critical for the artificial intelligence and green energy revolutions, analysts say. Chile is the largest provider of copper to the United States, whose President Donald Trump announced a punishing levy on the metal starting Friday. Government sources in Santiago told AFP delegations have been talking behind closed doors since Monday, seeking a Trump-pleasing deal that will in effect replace a free trade agreement in place since 2004. Impact on the US The United States imports about 45 percent of the copper it needs for industrial use, according to the US Geological Survey, a government agency. Of that, it gets 51 percent from Chile. According to Trump himself, it is "the second most used material by the Department of Defense" -- used in semiconductors, planes, ships, ammunition, data centers and missile defense systems. Trump "wants to revitalize a domestic industry that has faded and has been overtaken by China and has become reliant on foreign imports," Andy Cole, an analyst with the London-based Fastmarkets price-tracking agency, told AFP. Raising the tariff on imported copper will increase US production costs, which may boost demand for domestically sourced copper. But the United States does not have the capacity to increase its production overnight, and "in the long run the losers will be US consumers if they have the pay more for copper," said Cole. Juan Carlos Guajardo, director of Chilean consulting firm Plusmining, said the United States would need to produce between 600,000 and 800,000 tons of copper per year for its domestic industry, and would not be able to reach that level for "at least 10 years." Impact on Chile Chile is responsible for nearly a quarter of global copper supply, which contributes 10 to 15 percent to its GDP. Its Finance Minister Mario Marcel has warned of "medium-term" damage from a 50-percent tariff, but said the country could mitigate longer-term harms through "market diversification." For Guajardo, this means Chile can "redirect its copper," particularly "to Southeast Asia and India" or even Europe. China is by far the leading buyer of Chilean copper, accounting for 52 percent -- totaling $26 billion --in 2024, according to the South American country's central bank. The United States occupied a distant second place with imports worth $5.8 billion from Chile, followed by Japan with $5.3 billion and South Korea with $2.8 billion. According to Maurice Obstfeld, an economics professor at the University of California, Berkeley, "copper importers other than the US could gain" from the tariff hike. Exception? Chile says it has not been officially notified of the August 1 starting date for a copper tariff, and is still hoping to avoid it. The country's foreign ministry has said "confidential" talks with US delegates would continue to the last minute. According to Marcel, copper itself is not formally on the negotiating table, but will likely be included. "For this type of raw material, exceptions have been made in other agreements," he told Radio Duna earlier this week. After Trump's announcement on July 8, the price of copper soared to record levels in New York. US buyers rushed to stockpile the red metal before August 1, paying prices sometimes as much as 30 percent higher than in London.
France 24
3 hours ago
- France 24
Markets mixed as China-US talks end, eyes on tech earnings
After deals were reached with the European Union and Japan over the past week, focus has been on negotiations between Washington and Beijing to extend an agreement to lower eye-watering tariffs that threatened the world's top economies. The two-day meeting in Stockholm ended without a resolution but with the US team voicing optimism they could announce a second 90-day truce. Neither side has made public any details, although US Trade Representative Jamieson Greer said President Donald Trump would have the "final call" on any extension. Treasury Secretary Scott Bessent called the tone of the talks "very constructive". Chris Weston at Pepperstone said: "Progress on a further extension remains the well-subscribed base case, but Trump holds the final call on that, and we note there is still ample time until we reach the deadline of 12 August. "For now, the markets are unperturbed by what they hear and have a further impending 90-day extension fully priced." The general feeling is that the moratorium will be extended but there remains some nervousness, with many other countries still to reach agreements ahead of Trump's August 1 deadline. In early Asian trade, Tokyo was flat, while Hong Kong, Singapore and Manila were down and Shanghai, Sydney, Seoul, Wellington, Taipei and Jakarta rose. Among those countries still to reach a deal are Brazil and India, with the South American giant facing the threat of 50 percent tariffs. On Tuesday, the president said New Delhi could face a 20-25 percent rate, adding: "India has been a good friend, but India has charged basically more tariffs than almost any other country. "You just can't do that." Major earnings releases from tech titans Meta and Microsoft are due Wednesday, with Amazon and Apple coming Thursday. "It's been a solid US reporting season so far, but these mega-cap names need to run it hot and blow the lights out, given the bar to please has been sufficiently raised," Pepperstone's Weston said. As well as the results, focus will be on the firms' forecasts in light of Trump's tariffs and their colossal investments in artificial intelligence. The Fed is widely expected to stand pat on interest rates Wednesday, but investors will be looking for any hint of a cut in September after recent economic data indicated some softening in the labour market. Oil prices held Tuesday's gains of more than three percent -- their biggest in six weeks, according to Bloomberg News -- after Trump reiterated his warning of fresh sanctions on Russia unless it reaches a truce deal with Ukraine. Key figures at around 0230 GMT Tokyo - Nikkei 225: FLAT at 40,682.14 (break) Hong Kong - Hang Seng Index: DOWN 0.4 percent at 25,409.75 Shanghai - Composite: UP 0.4 percent at 3,624.08 Euro/dollar: UP at $1.1567 from $1.1554 on Tuesday Pound/dollar: UP at $1.3363 from $1.3357 Dollar/yen: DOWN at 148.06 yen from 148.50 yen Euro/pound: UP at 86.55 pence from 86.47 pence West Texas Intermediate: UP 0.1 percent at $69.25 per barrel Brent North Sea Crude: UP 0.2 percent at $72.68 per barrel
