Trump Tariffs on Brazil: Wood, Sugar Face 37.5% Levy; Coffee, Meat, Aircraft Spared

Trump’s Tariff Regime Spares Coffee and Aircraft but Hits Brazilian Timber and Sugar

The latest round of US tariffs on Brazilian goods spares coffee, meat and aircraft but imposes steep levies on wood, sugar, paper and chemicals, a detailed analysis by the American Chamber of Commerce for Brazil (Amcham) reveals. The maximum rate of 37.5% results from a baseline 25% tariff applied to Brazilian products plus a 12.5% surcharge linked to a US investigation into forced labour practices.

The differentiation is stark. While 83.4% of Brazilian wood exports to the US now face the 37.5% tariff, only 6.1% remain exempt. Sugar is similarly hard-hit, with 76.9% of shipments taxed at the top rate. Tobacco, arms and ammunition, and paper and cardboard saw nearly all exports pushed into the 37.5% bracket. Organic chemicals (53.7%) and medical-optical instruments (80.2%) were also heavily affected.

Conversely, products considered essential to the US economy largely escaped the new duties. Coffee, the iconic Brazilian export, faces no new tariff; 90.5% of meat exports were spared, as were 95.1% of fruit and vegetable preparations and 98.8% of prepared meats and fish. Aircraft—dominated by Embraer—also remain outside the new tariff net.

The Amcham survey found that 52.9% of total US imports from Brazil, worth $22.3 billion, remain untouched by the fresh measures. The new tariffs layer on top of existing trade barriers under Section 232, which already cover strategic goods like vehicles, aluminium, steel and machinery.

Behind the Numbers: Which Sectors Win and Lose Under the New US Tariff Structure

Wood and Sugar: The Heaviest Blow

Brazilian timber and sugar producers now face a clear commercial disadvantage in the US. With over 80% of wood exports and 77% of sugar exports slapped with a 37.5% duty, margins will compress rapidly. This forces exporters to either absorb the cost—eating into profits—or raise prices and risk losing market share to domestic US producers or to competitors from countries not facing the surcharge. For lumber, particularly, the new tariff coincides with high US construction demand, potentially redirecting Brazilian supplies to alternative destinations but at lower net returns.

The Forced Labour Surcharge and Its Ripple Effects

The 12.5% surcharge tied to a forced labour investigation is a critical new factor. It suggests the US is weaponising trade policy to enforce labour standards, and any Brazilian industry with supply chain vulnerabilities could be next. So far, only a subset of goods faces this surcharge, but the precedent is set: failing to demonstrate clean labour practices could trigger additional duties. For sectors already hit—wood, sugar, chemicals—the reputational damage compounds the cost, as buyers may seek to avoid products tainted by forced labour allegations.

Why Coffee, Meat, and Aircraft Escaped

The US decision to exempt coffee, meat and aircraft reflects a pragmatic calculus. Brazil is a dominant global supplier of these items, and imposing tariffs would disrupt US consumers and industries. Coffee is a household staple with few competitive import alternatives. Meat imports feed into the American protein supply chain, while Embraer aircraft serve regional airlines and US demand that rivals Airbus. The exemptions signal that Washington is willing to carve out areas of economic interdependence, even as it tightens the broader trade regime.

Section 232: The Old Tariffs Still Bite

While attention fixes on the new levies, many Brazilian exports remain governed by Section 232 national security tariffs imposed during Trump’s first term. Vehicles, aluminium, steel, and machinery continue to face those barriers. In some cases, the new tariffs are additional; in others, Section 232 still applies alone. This layered approach means that for industries like auto parts, the overall trade environment is already restrictive, and the force of the new measures is amplified.

What Brazilian Exporters and Investors Should Do Now

• Wood, sugar and chemical exporters should immediately recalculate US pricing and consider alternative markets such as Asia or the Middle East, as the 37.5% duty will erode competitiveness.
• Companies in these sectors must audit their supply chains for any forced labour exposure. Eliminating risks could help make the case for removing the 12.5% surcharge, a concrete step to reduce the tariff bill.
• Coffee, meat and aviation exporters can use their tariff advantage to expand US market share while competitors in other nations face higher barriers; they should lock in long-term contracts while the exemption holds.
• Investors should screen for listed Brazilian companies with significant US sales in wood, sugar, paper or chemicals—these will feel immediate margin pressure. Conversely, firms in exempt sectors may see outperformance in the short term.
• Brazilian trade negotiators should press for a review of the forced labour investigation and seek expedited processes to exempt compliant exporters. Simultaneously, they should target the Section 232 tariffs on vehicles and metals, which remain a separate but substantial burden.