Analysis: 25% US taxation could affect Brazilian wood and machinery

The United States is considering 25% tariffs on Brazilian products, which could affect a significant volume of Brazilian exports.

The measure is being discussed as part of an investigation conducted by the office of the American trade representative, which will open a public hearing on Brazilian trade policies and practices.

The investigation is within the context of so-called section 301 of the United States trade law. According to Lucinda Pinto, economics analyst at CNN Brasil, the products that could be most affected by the eventual tariff are predominantly industrialized.

The amount of Brazilian exports subject to the new taxation is around US$ 11.7 billion, out of a total of US$ 37.7 billion in exports to the United States.

Among the items that can suffer the impact are profiled coniferous wood, beef tallow, wooden doors and frames, natural honey, electrical transformers and hunting rifles and rifles.

"It's a longer list", highlighted Lucinda Pinto, highlighting that the volume is "very expressive".

Two products of great relevance in Brazilian exports, coffee and beef, are not on the list of items subject to the new tariff, as explained by the analyst.

Most impacted states
According to a survey by consultancy Íntegra Associados, the states with the highest volume of production and export of the products listed to the United States are São Paulo, Santa Catarina and Rio Grande do Sul.

However, the states that should feel the impact more directly, as they depend more intensely on this flow of exports, are Santa Catarina, Alagoas and Paraíba.

The furniture industry in Santa Catarina was cited as an especially susceptible sector. The mountain region of the state is recognized as a major exporter in the sector, with around 120 thousand jobs linked to this production chain.

"Santa Catarina will really feel the effect of this tariff, if it is actually approved", said Lucinda Pinto.

From a macroeconomic point of view, Íntegra Associados estimates that the impact on Brazil's GDP (Gross Domestic Product) should be barely noticeable, since only 10.8% of everything Brazil exports is destined for the United States.

However, sectoral effects are considered significant.

"It's not a macro effect, but it has an important micro effect", pondered Lucinda Pinto.

According to her, the industries most dependent on the American market "are expected to lose competitiveness, lose revenue, lose results and eventually have an impact on the job market."

The effect, therefore, is restricted to some sectors and presents relevant regional variations.

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Source: CNN