MercoPress. South Atlantic News Agency

Brazil eager to avert higher US tariffs

Alckmin chaired separate mmeetings with representativers from the agricultural and industrial sectors

Brazil is actively working to avert the implementation of 50% tariffs on its products by the United States, set to take effect on August 1 as announced by President Donald Trump. Vice President Geraldo Alckmin, along with other ministers, met with leaders from the industrial and agricultural sectors to discuss the severe potential impacts.

Also the South American country's Minister of Development, Industry, and Trade (MDIC), Alckmin chaired two meetings on Tuesday with leaders from the industrial and agricultural sectors. Alongside other officials, he was briefed on the outlook for these sectors in light of the United States' decision to increase import tariffs on Brazilian products to 50%.

The business leaders expressed confidence in the negotiations conducted by the federal government and argued against the adoption of retaliatory measures. Industrial and agricultural production are already suffering a series of losses. Some associations even argued that Brazil should request a postponement of the new tariffs.

Alckmin stressed that the Government intended to make as much progress as possible within this deadline and reach an agreement before the tariffs take effect.

“The meeting [with the productive sector] was very fruitful. We heard from all sectors with the highest trade flow with the United States—from aviation, steel, aluminum, machinery, textiles, footwear, paper, and pulp. What we saw was an alignment around the negotiation. I brought President [Luiz Inácio] Lula's message of commitment to review this situation,” said the vice president.

“From January to June this year, exports from Brazil to the United States increased by 4.37% and from the United States to Brazil increased by 11.48%. At a time when exports from the United States to Brazil are at a record high, almost three times more than our exports, we will be united to reverse this decision.”

According to the vice president, the productive sector has committed to dialogue with its partners in the United States—buyers, suppliers, and similar companies—to negotiate the bilateral damage caused by tariffs.

“It is an important relationship that also has repercussions in the United States, potentially making products more expensive and increasing the cost of the American economy. It is also an opportunity for us to open space for new trade agreements,” he said.

Agriculture and Livestock Minister Carlos Fávaro also participated in the meeting with leaders from the agricultural sector. He recalled that since the first day of President Lula's administration, one of the missions has been to expand markets for Brazilian agriculture.

“This was done intensively. A total of 393 new markets were opened,” said Fávaro, who considers all efforts to maintain sales to the United States to be important. Until the announcement of the tariff hike, the livestock sector expected meat exports to double this year. “The dialogue is open on the Brazilian side, but with respect for sovereignty and a great deal of pride.”

The representatives from the agricultural sector expressed their support and confidence in the government's efforts to reverse the decision, but presented a worrying picture of losses if the tariff is consolidated as of August 1. Among the productive sectors present were fishing, livestock, fruit, and coffee.

At a press conference, the president of the Brazilian Beef Exporters Association (Abiec), Roberto Perosa, assured that the tariff imposed by the US would make beef exports to the country unfeasible. According to him, several meatpacking plants have already suspended production, but about 30,000 tons are currently in ports or shipped to the US.

“Our immediate suggestion is to postpone the start of taxation. There are contracts in progress. We need an extension or a return to the previous situation. The sector is already taxed at around 36%. This 50% would be unfeasible for exports,” said Perosa.

The president of the Brazilian Association of Fruit and Derivatives Producers and Exporters (Abrafrutas), Guilherme Coelho, reported a climate of panic among mango producers. According to him, the harvest was planned six months ago, and 2,500 containers have already been contracted to transport exports ordered by the United States. Coelho argued that food should be left out of the tariff hike.

“I would like to congratulate Vice President Geraldo Alckmin, the Brazilian government, and Minister Fávaro for their quick initiative. At this point, we cannot take these mangoes and send them to Europe. We don't have the logistics for that,” explained the president of Abrafrutas.

“We cannot put these mangoes in Brazil because it will collapse the market. We urgently need a definition, consensus, flexibility, and global thinking so that we don't have to leave the fruit on the trees and cause mass unemployment.”

Orange producers also presented their concerns to the government, as 40% of their exports go to the US. According to calculations by the president of the National Association of Citrus Juice Exporters (CitrusBR), Ibiapaba Netto, 70% of the orange juice imported by the Americans is of Brazilian origin.

“There is still time for negotiation. We are confident that the government will achieve a good result. We need dialogue, negotiation, and pragmatism,” Netto emphasized.

Coffee industry associations also participated in the meeting with the federal government. Marcio Ferreira, president of the Coffee Exporters Council (Cecafé), said that 33% of all coffee consumed in the US was produced in Brazil.

“Brazilian coffee is the most competitive. It has a body and sweetness that coffee from other origins does not have. Consumers are satisfied and happy with Brazilian coffee,” Ferreira said. “We thank the government for everything it has done in Brazil and abroad, including opening up markets. We will find a solution, and it will be beneficial for everyone.”

Meanwhile, from the Brazilian industry sector, which had a sepparate meeting with Alckmin, National Confederation of Industry (CNI) President Ricardo Alban said during a press conference that the government and the business sector were “united and convergent” in seeking a solution, preferably before the scheduled date for the tax. Brazilian business leaders also committed to intensifying dialogue with the US private sector.

“We cannot remain in a state of unpredictability. We have perishable products involved in this issue,” said Alban, who advocates negotiation with the US. “Our understanding is that Brazil will not rush into retaliatory measures.”

Federation of Industries of the State of São Paulo (Fiesp) President Josué Gomes said that the sector has “absolute confidence” in the negotiating skills of the Ministry of Foreign Affairs (MRE) and the MDIC. “We will provide all the support and assistance necessary for Brazil to reach an agreement that benefits Brazilian and American companies,” said Gomes.

Alckmin did not rule out the possibility of seeking a postponement of the tax if Brazil and the US do not reach an agreement by August 1. The economic reciprocity law, approved by Congress this year, should be used to guide the Brazilian government's actions. The regulation of the law was published on Tuesday. (Source: Agencia Brasil)