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Piracicaba Fears Job Losses Due to Tariff Hike Affecting Exports to the U.S. The São Paulo City, Fourth Largest Exporter to the U.S., May Suffer a Severe Economic Impact from the 50% Tariff Announced by Donald Trump.
The loss of jobs due to tariff hike has become the biggest concern for residents of Piracicaba (SP). The city, which exported US$ 1.3 billion (around R$ 7 billion) to the United States last year, has seen its industrial sector — especially metal-mechanical — included in the maximum 50% rate set by the Trump administration. The fear is of a domino effect that starts in the industry, passes through commerce, and reaches services, affecting thousands of families.
According to a report by the newspaper O Globo, business owners, union leaders, and workers are already talking about collective vacations, layoffs, and dismissals, if there is no change in the rules. The impact may affect up to 5,000 formal jobs, with income losses amounting to R$ 242 million only in Piracicaba.
Why Is Piracicaba So Affected by the Tariff Hike?
The metal-mechanical industry is the economic engine of the city. Almost 50% of formal local jobs come from this sector, which exports agricultural machines, construction equipment, and automotive parts. Unlike other municipalities that received exemptions, Piracicaba did not escape the American tariff.
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Cristiane Feltre, a researcher at PUC-Campinas, explains that external dependency is decisive: “In the region, 36% of the workforce is linked to the industry. In the state and the country, this average does not exceed 18%.” This scenario puts Piracicaba in a position of vulnerability in the face of changes in international trade.
First Signs of the Crisis Are Already Appearing
Medium-sized companies, such as Tecparts do Brasil, have frozen export projects to the U.S. “Everything that comes abruptly this way causes stress,” said director André Simioni, noting that seeking new markets takes time.
The Union of Metallurgical and Mechanical Industries (Simespi) warns that the “second wave” will come soon. The estimate is up to 5,000 job cuts, with an immediate impact on local commerce and services.
The Weight of Caterpillar and Foreign Industry
A symbol of Piracicaba’s industrial hub is the factory of Caterpillar, the largest unit of the multinational outside the U.S., with 4,000 employees. The company exports 80% of its production — half to Americans. Rumors about production cuts are circulating in the city, but the global leadership states that no decisions will be made until there is more clarity in the scenario.
The dependency on international contracts jeopardizes not only direct jobs but the entire chain of suppliers and services that revolves around these factories.
Commerce and Services Also Feel the Impact
In the commerce sector, the atmosphere is one of apprehension. Jorge Aversa, vice president of the Commercial Association of Piracicaba, says that “the news of the tariff hike psychologically affected business owners.” Restaurants on Rua do Porto, a traditional tourist spot in the city, have already recorded a decrease in client traffic linked to business tourism.
Even driving school instructors fear losses. José Antônio Bueno, who has been active for 25 years, worries that “with less income, people will disregard getting their license to focus on basic needs.”
What Can the Government Do?
The federal government announced R$ 40 billion in credit lines via BNDES to support exporters. Moreover, business owners in Piracicaba are demanding payroll tax relief and trade defense mechanisms. However, experts assert that there is no “silver bullet” and that adaptation will be inevitable.
Municipal Secretary Thais Fornicola reminds that the city also exports sugar, alcohol, and vehicles to Mercosur. However, the U.S. accounts for almost half of total local exports. The dependency is so great that the value exported to Americans exceeds the municipality’s annual budget.
The loss of jobs due to tariff hike is a real threat to Piracicaba. From large industries like Caterpillar to small local businesses, the impact can spread quickly and compromise the economic stability of the entire region.
And you, do you believe that Piracicaba will be able to adapt, or will the tariff hike leave deep marks on the city? Leave your opinion in the comments and join the debate about the future of work in the region.
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