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Fernando Haddad said that the flow of trade between Brazil and the United States is now less than half of what it was in the 1980s and is expected to shrink even further after the 50% tariff.
In São Paulo, on August 18, 2025, the Minister of Finance, Fernando Haddad, stated that trade between Brazil and the United States is expected to decline further following the imposition of a 50% tariff by the U.S. on a significant portion of Brazilian exports.
According to him, the flow of trade between the two countries now represents less than half of what it was in the 1980s, and the outlook is for contraction if the deadlock continues. The statements were made at a seminar organized by Times Brasil CNBC and Financial Times.
Haddad also confirmed that the meeting intended to address the topic with the U.S. Treasury Secretary, Scott Bessent, was canceled the previous week, which cooled the chance of progress in negotiations in the short term. The meeting was specifically to discuss ways to mitigate the tariff increase.
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U.S. Demands “Impossible Solution” and Haddad Says Brazil Already Did Its Part in Negotiations
At the event in São Paulo, Haddad stated that the negotiation is not advancing because the U.S. has demanded from Brazil an “constitutionally impossible solution,” referring to the idea that the Executive should interfere in Judicial matters. According to the minister, the condition would be incompatible with the Brazilian Constitution. The government emphasized that it has already “done its part” at the negotiating table and is waiting for a gesture from Washington.
The seminar brought together authorities and business leaders to discuss growth and productivity, but the focus ended up dominated by the impact of the 50% tariff on Brazilian exports to the U.S. Haddad’s remarks aligned the political diagnosis with the reality of foreign trade, reinforcing that the flow of trade between the two countries has shrunk over the decades and could contract even further due to the new tariff cost.
50% Tariff: What Was Excluded and the Timeline
The additional tariff of 50% was announced by the U.S. government and came into effect on August 6, 2025, with transition rules for goods shipped before that date. The measure affects a broad range of Brazilian products, raising costs and reducing competitiveness in the largest market in the world.
There were, however, important exceptions. According to a technical note from the MDIC, 44.6% of the value exported by Brazil to the U.S. was excluded from the additional tariff, with nearly 700 items listed as exceptions. Among the cited products are aircraft, orange juice, oil, and iron ore, which remained under existing rates of up to 10% and not under the 50% surcharge. The details were released at the end of July.
Even with the exceptions, entire sectors remain under pressure. It is clear that the American strategy combined a broad list with exemption windows for segments sensitive to U.S. domestic consumption. For the Brazilian exporter, the scenario is one of increased price uncertainty, the need to revise contracts, and, in some cases, redirect sales to other markets.
Sectors Most Affected by the U.S. Tariff: Coffee, Steel, and Manufactured Goods
In the agribusiness, coffee has become a symbol of the impact. Media reports indicate that the product was not included in the main exceptions, which keeps price pressure on American imports and may lead to a reallocation of some purchases to other suppliers. The chain needs to evaluate delivery times, logistical costs, and quality premiums to sustain margins.
In industrial goods, steel and aluminum had already been facing a tougher tariff environment and remain sensitive. Machinery, electronics, and wooden items also lose momentum when the surcharge is applied, forcing companies to renegotiate adjustment clauses and revise portfolios for alternative markets. The effect tends to be more visible in spot contracts and among exporters with low geographical diversification.
In the aerospace industry, the risk of significant impact was discussed as soon as the tariff was announced. Part of the concern dissipated with the exclusion of aircraft from the list of exceptions, but uncertainty remains for parts and components in specific classifications. To avoid confusion, manufacturers continue to map NCM by NCM, as details of lists and origin rules can alter the effective calculation of the tariff.
Trade Data and the Trend for 2025
Before the tariff increase, the U.S. ranked among Brazil’s top partners. In 2024, exports of goods amounted to just over US$ 40 billion, with a similar value in imports, making a relevant flow of trade for the Brazilian agenda. However, the backdrop for 2025 is one of volatility, with a risk of slowdown in bilateral flow.
Haddad’s statement that the current flow of trade is less than half of what it was in the 80s helps to illustrate the structural change. Besides the tariff, there are changes in composition of the agenda and greater integration of Brazil with other regions, such as Asia and Europe. For the reader, the translation is simple: if the cost of selling to the U.S. increases, companies tend to seek other destinations, and this affects prices, exchange rates, and investment.
Reports from international media describe a political and diplomatic deadlock that has stalled negotiations in the short term. According to analysts, as long as uncertainty persists, Brazil should accelerate the diversification of markets and seek to resolve trade issues, such as the final chapter of the Mercosur-European Union agreement, to offset losses on the U.S. front.
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