The 50 percent tariffs President Trump imposed on Brazil this week are some of the highest he has applied on any country this year as he reshapes a global trading system he deems unfair to the United States.
But the United States actually has had a trade surplus with Brazil for over a decade.
Instead, Mr. Trump is targeting Brazil largely for political reasons — the prosecution of Jair Bolsonaro, his ally, who is accused of plotting a coup after he lost the last presidential election.
Mr. Trump has called the case a “witch hunt.’’ He is also targeting a Brazilian Supreme Court justice he believes is unfairly censoring conservative voices online.
Yet the tariffs were softened by hundreds of exceptions, including on some of Brazil’s most important exports to the American market, which could make the effect on Brazil’s economy less severe.
Still, the levies will affect billions of dollars worth of goods and, if they remain in place, inflict pain in both nations.
The levies are less dire than expected
Brazil and the United States mainly trade in energy products, iron and steel, aircraft and machinery. Brazil also sells commodities like coffee, beef, orange juice and spices in the American market. Many Brazilian goods arrive as semifinished materials that U.S. companies need to make their own products.
Some of these Brazilian exports, like steel, were already subject to tariffs imposed by Mr. Trump earlier this year. A long list of others, including orange juice and commercial aircraft, will be exempt from the new 50 percent tariffs.
“It actually wasn’t as bad as we feared,” said Paulo Feldmann, an economics professor at the University of São Paulo. “It gave us a certain sense of relief.”
Brazil must now decide whether to apply its own retaliatory tariffs on the United States, its second-biggest trade partner after China.
For now, the country appears to be taking a less confrontational stance.
President Luiz Inácio Lula da Silva has made clear that Mr. Trump cannot interfere in his country’s internal affairs, but said that Brazil remained open to negotiating on trade.
Tariffs will hurt, but are unlikely to cripple Brazil’s economy
The United States is an important trade partner for Brazil — but Latin America’s biggest economy isn’t shackled to the American market.
The United States sells billions of dollars more to Brazil than it imports from the country. Last year, it ran a $7.4 billion trade surplus with Brazil on about $92 billion in trade.
Brazil is in a better position to cope with tariffs than other nations Mr. Trump has targeted, such as Mexico and Canada, which have largely built their economies around exporting goods and services to the United States.
Brazil’s economy is fueled by a mix of domestic consumption and agricultural exports of products like oil, soybeans and beef. Exports account for about a fifth of its gross domestic product, with only 12 percent shipped to the United States compared with 28 percent to China, Brazilian government data show.
Even before Mr. Trump announced the higher tariffs, Brazil had already been reducing its dependence on the United States and forging closer ties with other countries through its alliance with the BRICS group of developing nations.
“I’m not going to cry over spilled milk,” said Mr. Lula in an interview with The New York Times on Tuesday. “If the United States doesn’t want to buy something of ours, we are going to look for someone who will.”
Brazilian coffee will be hard to replace
Nearly 700 products will be exempt from the tariffs, including products like fresh orange juice, which the United States mainly imports from Brazil.
These exceptions mean that about 45 percent of Brazilian products will be exempt from the new levy, according to Abrão Neto, president of the American Chamber of Commerce in Brazil. “This is a positive,” he said.
Instead, most of the economic fallout will be in a few key sectors.
Coffee is a major example. Brazil is the world’s biggest exporter of coffee beans and a major supplier to the U.S. market. Thirty percent of U.S. coffee imports come from Brazil, according to U.S. trade data.
Finding other sources of coffee will be difficult because drought and climate change have reduced harvests and squeezed global production. Brazil, on the other hand, can easily find new markets, Mr. Feldmann said.
“Brazil is extremely competitive,” he said. “There’s going to be no difficulty there.”
On beef, there are losers on both sides
Brazilian cattle ranchers and beef processors are facing a dire scenario. The United States is the second-most-important destination for Brazilian beef, and one that has been expanding rapidly in recent years.
“The United States market is a highly profitable market,” Roberto Peroso, president of the Brazilian Association of Meat Exporting Industries, told reporters. “And we had strong demand.”
Now, if tariffs make Brazilian beef less appealing, it would have to be sold in the domestic market or to other countries. “There is no market that can absorb all of this,” Mr. Peroso said.
Before Mr. Trump hit Brazil with high tariffs, the country had been a winner in the global trade war. Beef and coffee exports to the United States jumped sharply in the first five months of the year, as threats of levies by Mr. Trump on other major exporters like China and Vietnam made Brazilian products more attractive, government data show.
While the United States could replace some Brazilian beef with imports from other countries, like Argentina and Australia, the price of some products like ground beef could jump sharply as a result of the new tariffs.
Lis Moriconi and Janaína Camelo contributed reporting.
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