Brazil shifts trade toward China

Amcham Brasil said on July 8 that the United States accounted for 9.4% of Brazil’s exports in the first half of 2026, the lowest share for any first half since the current series began in 1997. Trade between Brazil and the United States totaled $36.4 billion in January through June, down 12.8% from a year earlier, according to the chamber’s monitor based on official trade data. China remained Brazil’s largest trading partner and widened its lead as U.S. demand for Brazilian goods weakened. ### How far has Brazil-U.S. trade fallen? Brazil’s exports to the U.S. market dropped 13% to $17.4 billion in the first half, while imports from the United States fell 12.5% to $19 billion, according to Amcham Brasil figures reported by Valor and The Rio Times. The U.S. remained Brazil’s second-largest trading partner in goods, but its share of Brazilian exports was down from 12.1% a year earlier, before the first round of U.S. tariff measures took effect. (riotimesonline.com) A separate Valor report published on June 22 showed the same trend over a longer rolling period. The U.S. share of Brazilian exports fell to 9.3% between August 2025 and May 2026, after tariffs of as much as 50% on some items were announced on July 31, 2025. (valorinternational.globo.com) ### What is pushing Brazilian trade toward China? China’s position strengthened as Brazilian exporters redirected shipments after U.S. tariff actions raised costs and uncertainty for American buyers, according to reporting by SCMP and The Rio Times. SCMP reported that the trade data landed as Washington weighed an additional 25% levy on Brazilian goods and as Flavio Bolsonaro, a Brazilian senator and son of former President Jair Bolsonaro, used a U.S. hearing to attack President Luiz Inacio Lula da Silva’s China policy. (valorinternational.globo.com) The shift has been visible for months. The Rio Times reported in April that Brazil’s exports to the United States fell 18.7% in the first quarter of 2026 after what it described as a 50% surcharge, while Brazil’s trade with China produced a $5.98 billion surplus. (scmp.com) ### What tariffs is Washington considering now? The Office of the U.S. Trade Representative said on July 2 that it would hold public hearings from July 7 through July 9 on proposed responsive action under Section 301 tied to alleged failures by 60 economies to prohibit imports made with forced labor. USTR’s June 2 notice set out proposed tariff actions following those investigations. (riotimesonline.com) Trade lawyers tracking the case said the June 2 proposal covered broad new tariff ranges on targeted economies. Gibson Dunn said USTR’s proposed forced-labor tariffs were an early test of whether the Trump administration could rebuild wide tariff coverage after the Supreme Court struck down earlier tariffs imposed under the International Emergency Economic Powers Act. (ustr.gov) Crowell & Moring said the proposed new duties ranged from 10% to 12.5% for most economies covered by the action. ### Who is warning about the cost? Business groups told USTR that broader tariffs would raise import costs and disrupt supply chains, according to the hearing notice and related reporting referenced in the briefing. Amcham Brasil’s trade monitor, cited by The Rio Times and Valor, showed that the contraction in bilateral trade was already measurable before any additional levy took effect. (gibsondunn.com) Flavio Bolsonaro appeared at the Washington hearing as Brazilian officials sought more talks before any new tariff deadline, according to SCMP and Valor. His intervention underscored that the dispute had become part of Brazil’s domestic political fight as well as a trade issue. ### What happens next? (ustr.gov) July 9 was the final day of USTR’s public hearings on the proposed Section 301 action, according to the agency’s schedule. The next formal step is USTR’s review of testimony and written submissions tied to the June 2 notice, which will determine whether the proposed tariffs move from hearings to implementation. (ustr.gov) (scmp.com)