Brazil downplays impact of US tariffs on 2025 growth

Brazil's government expects the 50% tariff U.S. President Donald Trump announced earlier this week on all goods from the South American country to have little impact on its economic growth this year, it said on Friday.

The Brazilian government downplayed the short-term effect of the tariffs, which are due to take effect on August 1, saying that only some specific manufacturing sectors would be hard hit.

The U.S. is a large importer of Brazilian oil, steel products, pulp, coffee, orange juice and beef - goods that the government said could find other buyers in global markets.

"Basic goods account for the largest share of items exported to the U.S. ...and tend to be more easily redirected to other countries and regions than manufactured products," Brazil's finance ministry said in a report.

"Given this scenario, the impact of the tariffs tends to be of little significance on 2025 growth, although some manufacturing sectors may be particularly affected."

Those include the aerospace industry, with the U.S. accounting for a large chunk of Brazilian planemaker Embraer's revenues, and energy-related machinery.

Brazilian President Luiz Inacio Lula da Silva on Thursday had already vowed to find new buyers for the country's products, saying in an interview with Record TV that "it is not like we cannot survive without the U.S."

The South American country is expected to grow 2.5% this year, according to government estimates that did not take into account the tariffs. Expansion would slow to 2.4% in 2026 due to tight monetary conditions.

Economic Policy Secretary Guilherme Mello told reporters on Friday that even if "some" effects are felt on growth, they would not be as relevant as before, saying that Brazil managed to diversify its trade partners over the past two decades.

Roughly 12% of Brazil's exports go to the U.S., while top trading partner China accounts for around 28%. The Asian superpower on Friday also slammed Trump's tariffs on Latin America's largest economy.

"Tariffs should not be used as a tool for coercion, bullying, or interference in other countries," Chinese Foreign Ministry spokeswoman Mao Ning told a news conference in Beijing.

In a letter to Lula, Trump linked the tariffs to Brazil's judiciary launching legal proceedings against former President Jair Bolsonaro, who is on trial on charges of plotting a coup to stop Lula from taking office in 2023.

In an interview with TV Globo on Thursday, Lula said he found Trump's reasoning for the tariffs "extremely outrageous."

It is "simply unacceptable," he said that Trump is "calling for an end to the witch hunt against a former president who tried to stage a coup in this country. He didn’t just try to stage a coup. He tried to prepare my death."