By Marco Túlio Vieira and Charles Jr.¹

In early 2025, the Trump administration reignited global trade tensions by imposing broad tariffs affecting several countries, including trade partners like Brazil. The tariffs of 10% on most Brazilian imports and 25% specifically on steel and aluminum sent immediate economic and political ripples across the bilateral relationship. According to U.S. Census Bureau data, USA-Brazil trade in 2024 totaled $92 billion. American exports to Brazil amounted to $49.7 billion (up 11.3% from 2023), while imports from Brazil, on the other hand, reached $42.3 billion (up 8.3%), resulting in a U.S. trade surplus of $7.4 billion. The Brazilian government expressed its surprise and confusion at why the country was being hit with tariffs, since the USA holds a surplus in bilateral trade.

Brazil's steel and aluminum sectors could be among the hardest hit. The USA is the 4th largest steel producer in the world. Brazil is currently the 9th in the world and the 1st in Latin America (followed by Mexico and Argentina). Data from the Brazil Steel Institute (a steel company think-tank) shows that the USA is the primary destination for Brazilian steel exports, accounting for 75% of steel exports in the 1st quarter of 2025, mainly semi-finished products. According to recent research, Brazil supplied 60.7% of US steel plate import demand in 2024, with the US importing 5.6 million tons of steel plate due to insufficient domestic supply. Brazilian steel producers exported 3.4 million tons to the American market last year. Despite these figures, the reports estimate minimal impact on Brazil's GDP, although the steel sector may lose up to US$1.5 billion in exports, and forecasts only a 0.01% reduction in GDP and a 0.03% decrease in total exports. The reduction in exports could lead to a 2.19% reduction in production, which could result in layoffs in a sector that employed over 237,000 workers in 2023.

Steelworkers' unions, on the other hand, fear that all the talk around tariffs is going to be used as one more opportunity to lay off workers and increase the output per worker, turning the workplace into an even more dangerous and sickening place, which has been a recurring situation over the last decades. Steelworkers were once known for their organization and protagonism in strikes and demonstrations,² especially during the redemocratization process. However, after the wave of privatizations and market liberalization in the 1990s, workers and their unions lost much of their power and ended up trapped in a defensive position.

Steel companies in Brazil have always pushed for more tariffs to protect local production, but mainly against Chinese exports, seeing cheap Chinese steel as a threat. Some unions even endorse this position and join the choir against the "Chinese threat," but companies that use steel in their production process, like carmakers, have had success in blocking any initiatives in that regard. The car industry has a significant influence on the Lula administration, not only because Lula himself was an autoworker, but because unions close to the government represent workers in the sector, making the government give constant support to car companies in order to try to prevent mass layoffs and outsourcing. This strategy, however, has had little to no effect. Car exports to the USA are minimal.

Major companies expressed concern following the tariffs, but maintained cautious optimism, noting that American demand had not yet declined significantly. However, uncertainty led Gerdau, a major Brazilian steel company, to cancel studies for the implementation of a special steel mill in Mexico. Gerdau's North American operation was responsible for 49% of the group's operating results in the first quarter.

The imposition of the tariff would yield a marginal impact on the United States' GDP, amounting to -0.02%, while producing somewhat more pronounced declines in investment (-0.49%), exports (-0.39%), and imports (-0.66%), alongside an increase of US$7.3 billion in the trade balance, a figure that remains negligible when juxtaposed with the substantial merchandise trade deficit exceeding US$1 trillion. At the sectoral level, imports of ferrous metals would decrease substantially by 39.2%, while domestic production would experience an uptick of 8.95%, with exports contracting by 5.32%. Moreover, other productive sectors within the U.S. economy would also be adversely affected, with declines in production in machinery and equipment (-1.1%), metal products (-0.9%), electrical equipment (-0.6%), and vehicles and parts (-0.5%), attributable to the increased production costs arising from the higher steel prices. Correspondingly, exports in these sectors would register reductions of -1.9%, -4.3%, -0.9%, and -0.7%, respectively, in addition to a contraction in the ferrous metals sector's exports by -5.3%.

Agribusiness is currently portrayed as the most profitable and important economic sector in the country, counting on the full support of the government. Main products exported to the USA are coffee, cellulose, and beef. Brazil exported 1.07 billion dollars of meat to Americans in 2024, a number that has been increasing over the last few years. The 10% tariff on all Brazilian products could cause ripple effects across the whole economy. However, the main consumer of Brazilian meat and animal-derived products is China, so the main impacts will probably be due to indirect effects on the sector. The orange juice industry faces new tariffs estimated to cost exporters an additional US$100 million annually. In 2024, the most exported agrarian product (in total value) was coffee, totaling US$ 2 billion. Then came meat and juices, especially orange juice, and sugar cane products such as sugar and ethanol.

As mentioned above, Brazil's main trade partner is China. The Asian country imported 74.65 million tonnes of soybean; 6.47 million tonnes of maize; 1.34 million tonnes of beef and 75,630 tonnes of coffee in 2024. The tariffs impact the "soybean triangle" trade involving the USA, Brazil, and China. Brazil had previously expanded its soybean exports to China during the earlier rounds of the USA-China trade war.

Despite these setbacks, most newspapers state that Brazil might paradoxically benefit from global trade realignment. The story they are trying to sell is that Brazilian companies should try to leverage their exports both to the USA, since other countries are suffering harsher tariffs, and to countries that would have their regular trade with the USA disrupted and may look for other sources of imports (one example is the possibility of higher tariffs on EU iron and aluminum, opening room for more exports to the USA). The steel industry wants to expand exports to India. Mainstream economists and the government alike also believe that Brazil could attract new foreign investments from countries and companies trying to diversify their portfolio. So far, the Lula administration hasn't put out any plan regarding promoting exports, curbing imports, or attracting investments. The federal government seeks to establish stronger ties with countries from the BRICS bloc, as well as to strengthen Mercosur and to reach a long-postponed trade agreement with the European Union. This often falls under the rhetoric of moving away from American imperialism (and the hegemony of the dollar) and establishing South-South agreements in order to empower the Global South. In the early 2000s, the so-called commodities superboom allowed the government to collect more taxes (even after all the fiscal benefits given to companies) and use part of this revenue to expand social security networks and direct cash transfer programs to the poorest population. The government has been trying to portray the economic bonanza of the first Lula presidency as what the population should expect for the future, but so far only its closer allies believe in such nostalgic feelings.

An economic risk, however, is that products which would otherwise be directed to the USA end up in the Brazilian domestic market, stirring competition, as illustrated by the footwear and garment industries.

Brazil's major exports to the United States encompass a diverse array of commodities and manufactured goods, reflecting both the strengths and the structural dependencies of the Brazilian economy. Among the most prominent items are crude petroleum and derivatives, underscoring Brazil's significant role as a key supplier of raw materials to global energy markets. According to the U.S. Census Bureau, Brazilian exports to the U.S. totaled approximately US $42.3 billion in 2024, representing around 2.2% of Brazil's gross domestic product, and highlighting the substantial yet relatively modest importance of this bilateral trade relationship within Brazil's overall export portfolio (U.S. Census Bureau). Notably, beef exports to the U.S. surged by 303% in the first four months of 2025 compared to the same period in 2024, with the U.S. accounting for 15% of Brazil's total beef exports during this timeframe.³ Additionally, Brazil's advanced aerospace sector contributed significantly through the export of aircraft and parts, largely driven by Embraer's production capacity.

Agricultural exports, particularly coffee, beef, and orange juice, reinforce Brazil's enduring role as a leading agribusiness exporter and underline the country's reliance on primary commodities as a principal source of foreign exchange. Conversely, U.S. exports to Brazil are dominated by higher value-added manufactured goods, including refined petroleum, machinery, aircraft, and chemical products, reflecting Brazil's dependency on imports to sustain its industrial base and technological advancement. This trade dynamic accentuates the country's subordinate position in global trade hierarchies, as Brazil exports predominantly raw materials and imports more sophisticated industrial products, a configuration that perpetuates its vulnerability to fluctuations in commodity prices and global demand. Politically and economically, this asymmetry exposes Brazil to external shocks and constrains its industrial development, reinforcing its role as a supplier of commodities within the global capitalist system. The bilateral trade relationship, while significant, thus embodies the structural limitations of Brazil's export-led growth model and complicates any narrative that portrays Brazil as a potential "winner" in the context of global trade realignments triggered by measures such as the Trump administration's tariffs.

Broader commodity price volatility and global investor caution could create secondary effects, especially if China's GDP were to shrink as a result of the more punitive tariffs, thus having indirect ramifications on exporters dependent upon it.

There are also concerns about global food security, since new trade barriers, including those involving Brazil, pose risks to the stability of global agricultural supplies, exacerbating vulnerabilities in food systems already stressed by climate change and conflicts.

Though criticism of Brazil's commodity export-dependence is not new, being conducted by sectors both within and outside the government that still believe in a developmental path for the country, the trade wars reveal the structural limitations of the export-led growth model, focused mainly on primary sector products like iron and steel, iron ore, and agricultural products. The dependency on certain commodities leaves the country vulnerable to shifts in global capital and trade policies, challenging any narrative that portrays Brazil merely as an opportunistic "winner" in global realignments.

President Luiz Inácio Lula da Silva was vocal in condemning the U.S. tariffs, describing them as harmful to the global economy. Brazilian lawmakers quickly passed the Trade Reciprocity Law, authorizing proportional retaliatory measures even if they contravened World Trade Organization⁴ guidelines. At the international level, the Brazilian government coordinated diplomatic efforts within an expanded BRICS bloc. Although no joint statement was achieved, Brazil reiterated its opposition to protectionism and reaffirmed its commitment to multilateral trade.

However, the government's approach is trapped within the logic of international capitalism. Simply diversifying partners or defending Brazil's "national interest" through better trade terms fails to address the deeper problem: Brazil's position in the global economy as a provider of cheap labor and raw materials remains structurally unchanged. Such strategies often reproduce the same dependency patterns under new configurations. Trade diversification does little to emancipate Brazil from global capitalist hierarchies. Unions and moderate left-wing parties are fast to point out this issue, however most of them are trapped in their support of the government and the maintenance of such a position by the fear of a growing right-wing movement and its chances of returning to the presidency.

It is true that there was some growth in the Brazilian economy in the last few years, and that the country is positioned as the 10th largest national economy. Unemployment reached the lowest level since 2012, being around 6.6%.

Successive governments since the military dictatorship tried to pursue a more autonomous economic growth model, and in the beginning of the 21st century Brazil could be seen as a minor imperialist power, with companies expanding to African and Latin-American countries. The crisis in the 2010s certainly imposed a setback on these aspirations.

Brazilian trade unionists, particularly from the Central Única dos Trabalhadores (CUT), have actively opposed the tariffs imposed by Trump. In a joint statement, leaders from major labor centers⁵ (including CUT and Força Sindical, the largest ones in the country, respectively left and right-wing) expressed strong condemnation of the 10% tariff on Brazilian exports to the United States. They warned that such measures would negatively impact production and employment, especially in the industrial and agribusiness sectors. The unions supported Brazil's Reciprocal Trade Law, which authorizes retaliatory actions against countries imposing trade barriers on Brazilian products. They also advocated for national policies to promote industrial growth and quality jobs, and international cooperation through BRICS. At the end of April, they delivered a document to President Lula outlining their key demands at the moment, going beyond the impacts of tariffs. Four demands stand out: a reduction in working hours without a reduction in wages; an end to the 6-day workweek (known as "the 6x1 scale"); exemption from income tax for those earning under R $5,000 (US $875) a month and harsh taxation of the super-rich.

The full impacts of the tariffs and the underlying trade war remain to be seen, as well as the direct and indirect effects on Brazilian workers' lives, employment, and livelihood. We were not able to find any evidence of major protests or radicalized actions. The only response that is more visible is the one given by the bureaucratic leadership of trade unions, mostly aligned with the federal government and not willing to disrupt the economy due to fears of contributing to the rise of the far-right political forces. So, whatever the impacts may be, there are currently no above-ground preparations to face them besides calling for support to the federal government and lobbying politicians, while hopefully expecting companies to "honor their part of the deal," thus protecting jobs, wages, and working conditions. This is the current situation of the Brazilian so-called left. There was also no information about autonomous workers' actions, so either they were too small and local, or they really haven't happened yet.

Workers in Brazil have been in a precarious position for over a decade, with most strikes and demonstrations being reactive, usually against cuts in rights or wages. The informal sector has grown significantly, reaching officially 31% of the employed workforce in 2024, according to data from the federal government. The current unionization rate is the lowest on record, a little above 8% and many workers distrust the large bureaucratic unions. Economic growth after the pandemic has been small and slow, but companies have successfully pushed any losses to workers in order to keep their profits. Struggles are usually fragmented and dispersed, the last massive demonstrations were the ones in 2013, the same year when strikes peaked. Autonomous workers' activities are severely needed to break away from reformist left-wing organizations and to surpass the numbing influence of the government and its allies. Many workers turn to the right-wing as a way of breaking with the status quo, strengthening the far-right.

The effects of Trump's policies have not yet been felt. It is possible that the situation will get even worse for workers and poor people. The cost of living keeps rising, despite price reduction in certain products. Government initiatives trying to address this issue have had little to no effect. Increases in wages were small in the last few years and continue to shrink or even to turn into an effective reduction due to inflation.

It is difficult to predict anything in such a muddy and uncertain situation, but the social tension is reaching a breaking point. The next months will be decisive and the government has little room for maneuvering. It is possible that workers take to the streets. Some small but independent organizations are constantly trying to promote demonstrations (the ghost of 2013 still haunts the minds of many people, both left and right-wing), although with no success. As an old labor activist once said, many things can happen, even nothing at all.

We will be closely watching the social tensions, the economy and how workers position themselves.

Marco Túlio Vieira and Charles Jr. are communist writers based out of Brazil.