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Workers at Taurus Start Collective Vacation After 50% Tariff Applied by the USA Impacts Exports. Measure Affects Production in São Leopoldo and Also Threatens Unit in Montenegro, with Direct Reflection on the Local Economy.
At least 40 workers at Taurus, in São Leopoldo (RS), were placed on collective vacation at the beginning of August after exports to the United States were impacted by the 50% tariff applied to Brazilian products.
The measure initially lasts for 15 days, with the possibility of extension for an equal period, and involves the line that assembles long-range firearms intended for the North American market.
Labor unions were called to negotiate alternatives and monitor the situation.
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50% Tariff and Immediate Impact on Production
The tariff was officially enacted by an executive order signed on July 30, 2025, adding 40% additional to the previously announced 10% rate.
The new taxation went into effect on August 6.
The U.S. government justified the measure as a response to trade policy, increasing the entry cost of Brazilian goods into the country.
For companies with a strong dependence on the American market, such as Taurus, the new tax burden pressures margins and contracts, increasing the final product’s cost.
What Changes at the São Leopoldo Factory
The decision by Taurus affects the area responsible for the assembly of long guns, produced for Companhia Brasileira de Cartuchos (CBC) — a company within the same group — destined for clients in the USA.
The temporary distancing was adopted as a short-term adjustment while the company reevaluates orders, stocks, and delivery timeframes.
The possibility of extending the collective vacation remains on the table, conditioned to the recovery of export flow or the adoption of compensatory measures.
Dependence on the U.S. Market
The São Leopoldo plant employs approximately 2,700 people and directs around 80% of its production to the North American market.
According to management, the new 50% rate “practically makes it unfeasible” to ship certain items.
This is the reason for the capacity adjustment adopted at the beginning of the month.
The company states it is maintaining dialogue with worker representatives to mitigate impacts and preserve jobs while managing the sales schedule.
Reflections in Montenegro and Local Revenue
In Montenegro (RS), the CBC unit informed local authorities that it may adopt collective vacations if the decline in exports persists.
The plant employs 473 employees and, in 2024, exported about R$ 250 million to the United States.
The factory is among the main generators of ICMS returns in the municipality.
A prolonged decline in external sales tends to reduce activity and local revenue, with a direct impact on the supply chain.
Strategies to Get Through the Period
In addition to operational adjustments in Brazil, Taurus has pointed out the plant in the USA as a key component to reduce tariff impact.
There is a targeted shift of assembly to U.S. territory.
The move gained momentum after the first round of surcharges announced in the first half, when the company also increased stocks in the destination market to ensure deliveries for a specified period.
The company claims to be monitoring the evolution of the situation and will keep production calibrated to actual demand.
Negotiations and Compensatory Measures
At the state level, the manufacturer is negotiating the anticipation of ICMS credits as a way to strengthen cash flow while exports remain constrained.
The measure, if validated by the government of Rio Grande do Sul, would serve as a financial bridge until the partial normalization of shipments.
Simultaneously, the company and sector entities are seeking dialogue with federal authorities to evaluate support instruments in light of the external tariff shock.
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