The Brazilian Agribusiness Association (Abag) said on Thursday it expects a diplomatic solution between Brazil and the United States about the tariffs announced by the US government. The entity stressed that the measure imposed by US President Donald Trump is “a political issue” that needs to be debated between countries.
In the letter announced the imposition of a 50% rate on Brazilian products from August 1, Trump mentioned Brazilian court decisions against former President Jair Bolsonaro and other “unfair” measures against US social networking companies.
For Abag, which represents the sectors of Brazilian agribusiness, there are no economic justifications for new tariffs, given the reality of years with American surplus in trade with Brazil, which is “admittedly an established and reliable commercial partner”.
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President Luiz Inacio Lula da Silva said in an interview with TV Record on Thursday that his government will first seek to negotiate with the United States the tariff issue, but warned that it will adopt reciprocity if these conversations were unsuccessful.
Brazilian Minister of Agriculture, Carlos Fávaro, classified 50% rates against Brazil as an “indecent action” and said the government is “acting proactively” to seek other markets.
ABAG also stressed that the decision on tariffs “will not only disadvantage the Brazilian exporter, but also the American consumer himself”, with increased prices for products such as coffee and orange juice, on which the US depend largely on the Brazilian offer.
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The entity cited the paper and pulp industries, beef, orange juice, sugar and coffee as the main affected in agribusiness by the 50%tariff.
The Confederation of Agriculture and Livestock of Brazil (CNA) stated in a statement that the path should also be that of negotiation, with “pragmatism”.
“Our hope is that diplomatic channels will be intensely triggered so that reason and pragmatism impose themselves for the benefit of all, for this is the only way that serves on understanding and prosperity,” said the CNA.
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The Federation of Industries of the State of São Paulo (Fiesp) also requested negotiations with “serenity, from true facts and statistics”.
Fiesp pointed out that there are many opportunities to expand business between Brazil and the US, ranging from rare land to the development of world standards for biofuels, including SAF (sustainable fuel for aviation).
The entity also cited sectors such as energy integration (ethanol and natural gas) and joint investments for the digitization of the economy, using electricity from renewable sources for data processing in both countries.
