Customs duties of 50% planned for Brazilian products entered into force on Wednesday, seven days after signing the decree by US President Donald Trump.
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While Brazil should not initially be affected by customs duties beyond the 10% floor now applying on a large part of the products imported into the United States, Donald Trump announced his intention to impose a surcharge of 50%, the highest applied to a particular country.
The American president criticizes the Brazilian justice for continuing ex-President Jair Bolsonaro, accused of an attempted coup after his defeat during the presidential election of 2022.
These prosecution, qualified by Donald Trump as “witch hunt”, also led to American sanctions against one of the judges of the Brazilian Supreme Court, Alexandre de Moraes.
Jair Bolsonaro was also under house arrest on Monday for expressed himself on social networks despite a ban linked to his current trial.
If customs duties have aroused a strong reaction from Brasilia, President Luiz Inacio Lula da Silva denouncing an attack on the “sovereignty” of his country, the Brazilian capital has put the impact of the surcharge into perspective.
AFP
Donald Trump’s decree indeed provides exemptions for several hundred products, from nuts to energy through the aeronautical industry or orange juice.
According to Valentina Sader, expert in Brazil for Atlantic Council, nearly 700 products are thus exempt from the surcharge.
In the end, only 36% of the country’s exports to the United States are really concerned, according to the Brazilian government.
Reduce Brazil exposure
“These customs duties are not good news, but we could expect worse,” said Ms. Sader, for whom the Brazilian economy should be able to “resist surcharge”.
“The government seems to be ready to subsidize some of the most affected sectors, but Brazil should be expected to seek to diversify its exports,” she added, questioned by AFP.
The United States is an important partner for Brazilian companies, but not essential: certainly it is the second market in Brazil, with 12% of exports, but this remains very behind what China represents today, where more than a quarter of the Brazilian exports leave.
Certain important sectors, such as coffee, are however more exposed to the American market and are applied the surcharge by 50%.
The increase in customs duties on Brazilian products comes 24 hours before that which should concern all the main trade partners in the United States.
Several dozen countries must indeed see the surcharge applied to their products increase significantly when entering American territory, with a range ranging from 11% to 41%, Syria being the country targeted by the highest rate.
Some countries still hope to lower the rate applied to them, such as Switzerland which has received a surcharge of 39%. The president of the Confederation, Karin Keller-Sutter, and her Minister of the Economy, Guy Parmelin, arrived in Washington on Tuesday for new negotiations.
They hope to lower this surcharge, to get closer to the much more advantageous rate offered to products from the European Union (EU), set at 15%.
This new increase in customs surcharge should bring the average effective rate to almost 20%, according to analysts at Pantheon Macroeconomics, which would constitute the highest rate applied to imported products since the early 1930s, according to the LAB budget of the University of Yale.