Brazil's São Paulo State Prepares Measures to Mitigate Trump Tariff Impact

Brazilian state São Paulo is preparing measures to mitigate the impact of potential 50% tariffs on exports to the US, which will come into effect on August 1. The tariffs could affect up to 120,000 jobs and cause a 2.7% decline in the state's GDP, according to Governor Tarcísio de Freitas. The state is working on support measures, including five-year credit lines to boost cash flow. Freitas criticized President Luiz Inácio Lula da Silva's handling of relations with the US and President Donald Trump.

São Paulo, Brazil's economic powerhouse, is bracing for the potential impact of a 50% tariff on its exports to the United States, set to take effect on August 1, 2025. The tariffs, announced by the U.S. government, threaten to eliminate up to 120,000 jobs and reduce the state's GDP by 2.7%, according to projections by the São Paulo State Economic Department [1].

The state's Governor, Tarcísio de Freitas, has criticized President Luiz Inácio Lula da Silva's handling of relations with the U.S. and President Donald Trump. In response, São Paulo is preparing a series of measures to mitigate the potential economic blow. These include the implementation of five-year credit lines to boost cash flow for affected businesses [1].

The tariffs target key industries in São Paulo, such as aviation, agriculture, and heavy machinery. For instance, Embraer, the world's third-largest aircraft manufacturer, faces a potential loss of $3.6 billion in revenue by 2030 due to the increased cost of planes sold to U.S. carriers [1]. Similarly, Brazil's orange juice exports, predominantly from São Paulo, are expected to suffer significant losses, with the wholesale price of oranges collapsing by 40% since the tariff announcement [1].

The state is also accelerating trade diversification talks with the European Union and China to reduce its dependence on U.S. trade. Additionally, the Brazil-U.S. Business Council is lobbying U.S. Congress members to find a diplomatic resolution to the tariffs [1].

The U.S. consumers are also expected to feel the impact of these tariffs, with the National Retail Federation projecting price increases of 12-18% on Brazilian goods [1]. The clock is ticking towards August 2025, and without urgent diplomatic resolution, São Paulo's factories may idle, groves may decay, and families may face ruin while Americans pay more for everyday goods.

References:

[1] https://inews.zoombangla.com/us-tariffs-on-brazil-sao-paulo-faces-120000-job-losses-1-3b-economic-blow/