U.S. spares Brazil from 50% tariff surge on jets and orange juice

Brazil narrowly avoided a significant tariff hike on its exports after the U.S. announced last-minute exemptions for key products such as Embraer passenger jets and orange juice, which will remain subject to the 10% duty instead of the threatened 50% increase. The decision, which came with limited prior consultation between Washington and Brasília, provided immediate relief to businesses and traders amid tensions over U.S. demands to influence Brazil’s judiciary [1]. President Luiz Inácio Lula da Silva, who has consistently defended the independence of Brazil’s Supreme Court, now faces the challenge of converting this temporary reprieve into a long-term trade agreement with the U.S., its second-largest export market [1].

The U.S. exemption was reportedly coordinated through direct outreach from Brazilian business leaders, including executives from Embraer, rather than through formal diplomatic channels. This strategy underscored Brazil’s insistence on maintaining national sovereignty in legal and political matters, a stance that has drawn both domestic support and criticism from U.S. hardliners [1]. The timing of the exemption also coincided with a series of sanctions issued by Justice Alexandre de Moraes just hours earlier, raising concerns about potential further U.S. action against Brazilian officials [1].

President Lula hailed the move as a “sacred win for our sovereignty,” emphasizing that Brazil can resist external pressure without compromising its judicial independence [1]. However, the broader economic landscape remains uncertain. While some relief was granted for high-profile goods, important sectors like coffee and beef—commodities in which Brazil holds a global leadership position—were not included in the exemptions and may require government intervention to protect domestic producers and exporters [1]. The Central Bank, meanwhile, chose to maintain the Selic interest rate at its current level, reflecting caution in the face of rising inflation and potential new tariffs [1].

The political climate is further complicated by the upcoming trial of Jair Bolsonaro, which could trigger renewed U.S. pressure on Brazil. Brazilian officials, including Finance Minister Fernando Haddad and Vice President Geraldo Alckmin, have expressed growing frustration with U.S. negotiators, arguing that Brazil’s trade deficit with the U.S. makes the imposition of tariffs seem inconsistent with U.S. trade practices with other nations [1]. Foreign Minister Mauro Vieira recently met with U.S. Secretary of State Marco Rubio, reiterating Brazil’s openness to trade negotiations while reaffirming that its legal system remains beyond external negotiation [1].

In the corporate sector, the news was met with optimism. Embraer, a major player in the U.S. market, saw its stock rise by 11% following the announcement, and its CEO humorously referred to himself as the “Chief Tariff Officer” [1]. Itau now predicts that the average tariff on Brazilian goods will settle at around 30%, down from an earlier estimate of 40%, reducing the likelihood of retaliatory measures and easing concerns about a broader trade conflict [1].

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[1] https://coinmarketcap.com/community/articles/688b97a682b52607e11b4c94/