The chemical industry of Brazil reacted with concern on Friday because new U.S. tariffs threaten to break their deeply connected trade relationship. The executive order signed by President Donald Trump establishes a 50% duty on Brazilian exports which include chemicals and could affect $1 billion worth of annual shipments.
The national chemical association Abiquim stated that the tariffs would damage supply chains and employment opportunities and investments throughout the relationship between the two countries. The group described the sector as “highly interdependent” because of extensive cross-investment and joint production networks throughout the years.
Abiquim together with the American Chemistry Council has filed a joint petition to U.S. and Brazilian authorities to protect supply chain stability and maintain regulatory partnerships. Brazil exported $2.4 billion in chemical products to the U.S. last year but ran an $8 billion sectoral deficit.
The tariff order includes only five specific products which make up $697 million of the 2024 sales total thus indicating extensive impact on the market. Several companies have started canceling orders before the August 6 effective date of the tariffs.
The Brazilian chemical inputs serve as essential components for food production and textile and rubber manufacturing industries which will experience negative effects from these tariffs. Some analysts view this measure as politically driven because of U.S. criticism toward Brazil’s Supreme Court and support for former President Jair Bolsonaro
