Brazil could be safer from US tariff fallout than other LatAm countries

In light of US tariff threats made over the weekend, Latin American governments need to sharpen their soft power skills to deal effectively with the Donald Trump administration.

Trump has claimed he wanted to impose tariffs on countries that run a trade surplus with the US, but at least in Latin America, he is more focused on pressuring governments to accept stricter immigration measures.

On Sunday, the US threatened to apply a 25% tariff on Colombian products because President Gustavo Petro refused to accept deportation flights that violated human rights. The White House has since called off the tariffs after it agreed to the terms set out by Petro, who also threatened to impose counter-tariffs.

In Brazil, media reported that deportation flights arriving to the country showed deportees had been mistreated by US authorities. The government has not commented publicly.

"Brazil is internationally recognized as a country with high diplomatic skill, avoiding open conflicts with any nations, regardless of whether the sitting president follows an ideologically opposed political line to other countries, as is the case now, with the Brazilian president being from the left and the United States president from the right," André Pereira César, a political analyst at Hold Consultoria, told BNamericas.

In 2024, Brazilian exports to the US reached US$40.3bn and imports US$40.6bn, resulting in a trade deficit of US$253mn, according to Brazil’s development and industry ministry.

Of the total exports, 14% were crude oil, 8.8% semi-finished products of iron or steel, 6.7% aircraft and aircraft equipment, 4.7% unroasted coffee, 4.4% pig iron, 4.3% fuel oils and 4.2% wood pulp.

Signaling that the government deems trade with the US crucial, on Monday, development bank BNDES approved 2.1bn reais (US$356mn) in financing for local aircraft maker Embraer to sell 16 E-175 aircraft to US airline Republic Airways.

Conversely, 15% of imports from the US related to motors and non-electric machines, 9.7% to petroleum derivatives and 4.9% to aircraft and equipment.

The US is the second most important trade partner for Brazil, behind China. Last year, Brazil exported US$94.4bn to China and imported US$63.6bn. A third of Brazilian exports to China comprise soybeans, 21% iron ore and 21% crude oil.

"Although China is going through a period of delicate economic activity, Brazil's relationship, as a member of the BRICS bloc, composed of Brazil, China, Russia and South Africa, may help the country mitigate some risks. Trade conflicts with the United States are bad, but Brazil has a cushion that softens these risks by being part of the BRICS, a factor that, for example, Colombia and Mexico don't have, leaving these countries much more exposed to the risks associated with the tariff policies of the United States," added César.