Donald Trump’s decision to reduce tariffs on imports of beef, tomatoes, coffee and bananas has increased the value of Brazilian exports to the United States free of additional tariffs from 23% to 26%, Vice President Geraldo Alckmin (PSB) said on Saturday (15).
The calculations provided by Alkmene take into account the balance of exports to the United States last year, which amounted to about $40 billion. The increase in this percentage is due, in large part, to the elimination of tax rates on orange juice.
According to the Vice President, just over $10 billion in Brazilian exports should be exempt from additional tariffs imposed by the Trump administration. This does not mean that the products have zero tariffs, because there may be old tariffs already imposed, lower than those applied by the current US president.
“We had, with no tariffs, 23% of Brazilian exports, which last year, in round numbers, amounted to 40 billion US dollars. The third main destination of Brazilian exports (the United States). That was 23%, and with this decision, Brazilian exports increased from zero to 26%, practically without taxes. It was positive and we will continue to work,” Alckmin said at a press conference.
The Vice President said that the tariff reduction, which Trump announced yesterday, is progress, but there is a “course of action” ahead of us to correct what he called “distortions.”
He stated that despite the abolition of the 10% global tax on a number of products, Brazil still imposes an additional 40% tax, which is still “very high.”
An additional 40% customs duty is charged on many Brazilian products. Coffee, for example, got the 10% cut Trump announced on Friday, but is still subject to high surcharges. He said the impact of tariffs still affects Brazil’s competition with other countries, but Trump’s decision is “good, and in the right direction.”
Alkmene attributed Trump’s decision to a number of factors. Among these problems are the US government’s sensitivity to increases in the prices of products subject to tariffs, pressure exerted by American and foreign businessmen, and efforts made by Brazilian diplomacy to resolve the impasse.
On Friday (14), the US President signed a measure to reduce tariffs on imports of beef, tomatoes, coffee and bananas, in a move aimed at controlling food price inflation in the country after the tariffs.
Among other commodity exporting countries, the measures could benefit Brazil, the world’s largest coffee producer and second-largest beef producer, behind only the United States, according to USDA data.
But the decree published by Trump only applies to 10% of the so-called “reciprocal tariffs” imposed in April on all countries. The 40% surcharge on Brazil remains in effect.
The decree adjusts the scope of tariffs on the basis of national security, one of the pillars of Trump’s strategy to address what he classifies as “the United States’ large and persistent trade deficit.”
The decision comes after recommendations from the authorities charged with monitoring the national emergency declared by Trump in April. The government cited negotiations with trading partners, domestic demand and U.S. production capacity as factors that prompted the review.
“I have determined that it is necessary and appropriate to further adjust the scope of products subject to the reciprocal tariff imposed under Executive Order No. 14257 (the action that implemented the 10% global tariff),” the decree said.
On Friday, after the measure was issued, Trump said aboard Air Force One that further tariff cuts would not be necessary.
“We just did a little retreat,” he said. “Coffee prices were a little high, and now they will come down in a very short period of time.”
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