BRASILIA - The US government's list of exceptions to the 50% tariff to be imposed on Brazilian products left 82% of everything exported by Brazilian agribusiness to the United States in the first half of this year outside the exemptions - a value corresponding to US$ 5.412 billion.

An exclusive survey conducted by Estadão/Broadcast reveals that only US$ 1.220 billion of agribusiness shipments were covered by the removal of the additional 40% tariff made official this Wednesday , remaining subject to only the 10% tariff.

The amount is equivalent to 18% of the R$6.631 billion in agricultural products exported, according to Agrostat - the Brazilian agribusiness foreign trade statistics system, managed by the federal government.

The report cross-referenced the codes from the Harmonized Tariff Schedule of the United States (HTSUS), as listed in the annex to the US government's executive order, with the codes from the Mercosur Common Nomenclatures (NCMs) found in Agrostat.

Among the main agribusiness products exported to the United States, orange juice, cellulose and nuts were spared the surcharge, remaining only exposed to the 10% rate in effect since April 5. However, coffee, beef, fruits, fish, sugar and ethanol and cocoa remain subject to the tariff increase.

Considering the total number of NCMs (National Market Tax Codes) for products exported from Brazilian agribusiness to the North American market from January to June, available on Agrostat, out of 789 items, only eight NCMs were included. They are:

• chemical pulp of non-coniferous wood, soda or sulfate, semi-bleached or bleached;
• unfrozen, unfermented orange juice; frozen, unfermented orange juice;
• chemical wood pulp for dissolving;
• twine of sisal or other textile fibers of the genus Agave, for binding or baling machines;
• other tropical woods (cedar, ipê, ivory wood, laurel, etc.), sawn, sliced or peeled, 6 mm thick;
• chemical pulp of non-coniferous wood, soda or sulfate, raw;
• Brazil nuts, fresh or dried, in shell.

Because of the difference between codes, some NCMs may contain more than one item from the United States Harmonized Tariff Schedule.

Of the top 20 agricultural products exported to the US, only orange juice and non-coniferous wood pulp were included in the list of exceptions to the 50% tariff. Sectors with significant shipments to the United States, such as green coffee, whose shipments from January to June totaled US$1.169 billion, frozen boneless beef (US$738 million), and beef tallow (US$249 million), continue to be affected by the 50% tariff.

There were expectations that coffee, mangoes, and cocoa would be included in the list of exemptions, but this did not happen. This expectation had been fueled by conversations between exporters and their American counterparts and by a statement by U.S. Secretary of Commerce Howard Lutnick, who acknowledged that the country may reconsider and exempt goods not grown on American soil, such as coffee, cocoa, mangoes, and pineapples. He did not specifically mention Brazil.

The tariff will take effect in seven days for products already in the United States and on October 5 for those shipped within seven days, according to a statement from the United States government.

Below is a list of 694 exceptions to the 50% surcharge made official by the White House (you can search by item name):

‘It makes no sense for coffee to be among the overtaxed items’

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A survey conducted by Insper Agro Global at the request of Estadão/Broadcast reveals that, when considering the closed year of 2024, the US government's exceptions to the 50% rate imposed by Trump reach 20.8% of the total agricultural products exported by Brazil to the United States.

In nominal value, the exceptions cover US$2.512 billion of a total of US$12.082 billion in national agribusiness products shipped to the North American market last year.

According to Marcos Jank, coordinator of Insper Agro Global, this list of exempt products shares a common characteristic: the interest of American companies. He cites that companies like Suzano, in the pulp sector, are considering investments in the United States, and that orange juice importers have lobbied the domestic government given their exposure to the Brazilian beverage."These are products for which the United States has no substitutes elsewhere," the professor noted.

The biggest surprise, according to Jank, was that coffee was left off the exemption list, since 76% of Americans consume coffee and Brazil is the main supplier."It makes no sense for coffee to be among the overtaxed items, because the initial idea behind reciprocal tariffs was to focus on the trade surplus and encourage reindustrialization, which won't happen with coffee that isn't grown," he noted.

The expectation, says Jank, is that more products will be included on the exemption list, especially those not grown in the United States."I believe the next list should include exemptions for tropical products like coffee, cocoa, and mangoes. There's no reason for these products to be subject to full taxation," noted the coordinator of Insper Agro Global.

The biggest question regarding the main agricultural products exported by Brazil to the US, Jank pointed out, is whether there will be an exception for beef. Brazilian exports to the North American market reached record levels last year and have been growing due to the reduction in the local cattle herd.

"Australia and other suppliers, such as Canada and Mexico, don't have the meat they need in terms of volume and specificity. If the meat remains subject to a full 50% tariff, it will be a problem for their hamburger production because Brazil is the largest supplier of front cuts. However, unlike tropical products, the meat is also produced by the United States, and these countries are competitors in the global market," the professor stated.

In Jank's analysis, protein deserves attention in bilateral negotiations, especially due to the product's potential impact on the local inflation rate.