By Luciana Magalhaes and Ana Mano
SAO PAULO (Reuters) -Brazilian companies reacted with a mix of relief and doubt after the White House surprised them on Wednesday with a list of nearly 700 exceptions to the 50% tariff U.S. President Donald Trump imposed on the country’s exports from August 6.
While the exemptions cover major Brazilian exports such as aircraft, iron ore, and orange juice, the country estimates that 35.9% of its sales to the U.S. by value will be hit by the new tariff. Key exports like beef and coffee were notably absent from the exemption list.
“We can say that it was a very surgical selection, insofar as the United States chose products of greatest relevance to them and also in Brazil’s export agenda,” said Gilberto Braga, an economist at IBMEC university.
Andre Ribeiro Chaves, director of the Fergubel steel mill in the state of Minas Gerais, said he would call back more than a hundred workers he had put on leave.
“These exceptions gave us a certain comfort,” he said.
But Abrafrigo, a beef lobby that represents Marfrig and small Brazilian meatpackers, said the new tariffs make sales to the U.S. impossible, adding that exporters may lose $1.5 billion in sales of beef and byproducts through the end of the year.
Still, even as some companies celebrated and others calculated their losses, many remained confused about the exemptions.
While some lumber products benefited from exclusions, for example, companies in the sector are still trying to understand which segments of the industry will be affected by the new tariffs. Millpar, a manufacturer of wood-based products in southern Brazil, said it was still unsure about whether to call back the hundreds of workers it had put on leave.
In the U.S., the exemptions to the full tariff were similarly welcomed.
The Consumer Brands Association expressed optimism with the Trump administration’s recognition of the scarcity of certain natural resources, like eucalyptus and other wood pulp products.
“We strongly encourage Brazilian officials to pursue a deal with the Trump administration that achieves the same recognition for coffee and other key inputs critical to the U.S.,” said Tom Madrecki, vice president of supply chain resiliency at the association.
Many in Brazil remain hopeful for further exemptions.
“We believe there is scope for this flexibility, especially since Brazilian beef is a staple for everyday consumption in the U.S.,” said Fabrizzio Capuci, the commercial director at Naturafrig Alimentos, a beef exporter that has suspended shipments to the United States.
(Reporting by Luciana Magalhaes and Ana Mano in Sao Paulo, additional reporting by Sergio Queiroz and Jessica DiNapoliEditing by Nick Zieminski)
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