08 October 2025
US-Brazil Trade Tensions Escalate: Trump and Lula Negotiate Tariff Rollback Amid Economic Pressure
Brazil Tariff News and Tracker
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Listeners, today’s top story is the dramatic turn in US-Brazil trade relations, making headlines around the world. Just days ago, President Donald Trump initiated a direct call with Brazilian President Luiz Inácio Lula da Silva, following up their September meeting in New York, and the two leaders agreed to accelerate negotiations aimed at resolving the current tariff crisis. Brazilian media and White House releases confirm that a personal summit could come as early as the end of October, possibly at the ASEAN meeting in Malaysia.
These developments have amplified hopes that the United States may soon reduce or even remove the steep tariffs currently afflicting several Brazilian export sectors. Under Executive Order 14323, since August, most Brazilian products face a 40% surcharge on top of an adjusted 10% reciprocal tariff. That’s a total effective US tariff rate of 50%. Lula called these “unjust” in a recent interview, reiterating Brazil’s demand for a rollback to the former 10% rate.
The profound impact of these tariffs is felt throughout Brazil’s economy. Key manufacturing sectors, especially chemicals and metals, are under pressure, as the National Industry Confederation reported wide declines for August, including a 2.3% drop in chemicals and nearly 8% in computer and electronics production compared to last year. The much-watched PMI manufacturing index is now in contraction for a fourth straight month, signaling negative momentum across industry.
Brazil’s sugar industry offers a stark case study. Since Trump’s tariffs took hold, exports of Brazilian sugar to the US plummeted over 80%. September shipments were just over 21,000 tonnes—a dramatic 84% drop year-on-year—causing a 77% collapse in revenue, per Brazil’s Foreign Trade Secretariat. Many mills in Brazil’s north and northeast are now struggling, while organic producers have seen their US market decimated. Lula, on his call with Trump Monday, urged a reversal of not just product tariffs but punitive measures on Brazilian officials.
Notably, some Brazilian exports remain partially shielded. According to data by S&P Global Ratings, about 43% of exports benefit from exemptions to the 40% additional IEEPA tariff, resulting in an adjusted net reciprocal rate of 10% for parts of the trade.
On other fronts, the US this week announced new Section 232 tariffs on wood products, including 10% globally on softwood lumber and up to 50% on kitchen cabinets, coming into effect October 14. While most Brazilian timber exports are hit by these new tariffs, certain products retain exceptions or face lower rates.
Meanwhile, the heat from US tariffs is pushing Brazil to diversify trade. India and Brazil are now deepening their preferential trade pact—their bilateral trade is targeting $20 billion within five years—with both facing up to 50% total US tariffs. These new talks emphasize the urgent need for Brazil to look beyond the American market.
With manufacturing, agriculture, and consumer sectors in both nations feeling the economic pinch, the outcome of the coming Trump-Lula summit will be pivotal for Brazilian exporters and US importers alike. Listeners, we’ll keep tracking every negotiation, as tariff truce talks and escalating trade measures continue to shape Brazil’s standing in the global market.
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This content was created in partnership and with the help of Artificial Intelligence AI
These developments have amplified hopes that the United States may soon reduce or even remove the steep tariffs currently afflicting several Brazilian export sectors. Under Executive Order 14323, since August, most Brazilian products face a 40% surcharge on top of an adjusted 10% reciprocal tariff. That’s a total effective US tariff rate of 50%. Lula called these “unjust” in a recent interview, reiterating Brazil’s demand for a rollback to the former 10% rate.
The profound impact of these tariffs is felt throughout Brazil’s economy. Key manufacturing sectors, especially chemicals and metals, are under pressure, as the National Industry Confederation reported wide declines for August, including a 2.3% drop in chemicals and nearly 8% in computer and electronics production compared to last year. The much-watched PMI manufacturing index is now in contraction for a fourth straight month, signaling negative momentum across industry.
Brazil’s sugar industry offers a stark case study. Since Trump’s tariffs took hold, exports of Brazilian sugar to the US plummeted over 80%. September shipments were just over 21,000 tonnes—a dramatic 84% drop year-on-year—causing a 77% collapse in revenue, per Brazil’s Foreign Trade Secretariat. Many mills in Brazil’s north and northeast are now struggling, while organic producers have seen their US market decimated. Lula, on his call with Trump Monday, urged a reversal of not just product tariffs but punitive measures on Brazilian officials.
Notably, some Brazilian exports remain partially shielded. According to data by S&P Global Ratings, about 43% of exports benefit from exemptions to the 40% additional IEEPA tariff, resulting in an adjusted net reciprocal rate of 10% for parts of the trade.
On other fronts, the US this week announced new Section 232 tariffs on wood products, including 10% globally on softwood lumber and up to 50% on kitchen cabinets, coming into effect October 14. While most Brazilian timber exports are hit by these new tariffs, certain products retain exceptions or face lower rates.
Meanwhile, the heat from US tariffs is pushing Brazil to diversify trade. India and Brazil are now deepening their preferential trade pact—their bilateral trade is targeting $20 billion within five years—with both facing up to 50% total US tariffs. These new talks emphasize the urgent need for Brazil to look beyond the American market.
With manufacturing, agriculture, and consumer sectors in both nations feeling the economic pinch, the outcome of the coming Trump-Lula summit will be pivotal for Brazilian exporters and US importers alike. Listeners, we’ll keep tracking every negotiation, as tariff truce talks and escalating trade measures continue to shape Brazil’s standing in the global market.
Thank you for tuning in and don’t forget to subscribe. This has been a quiet please production, for more check out quiet please dot ai.
For more check out https://www.quietperiodplease.com/
Avoid ths tariff fee's and check out these deals https://amzn.to/4iaM94Q
This content was created in partnership and with the help of Artificial Intelligence AI