Lula government sees 10% reduction on commodities as positive but insufficient

Members of the Lula government’s economic team see American President Donald Trump’s decision to suspend tariffs on agricultural commodities such as coffee, beef, bananas and açaí as positive, but insufficient. Technicians state that the tariff will be reduced by 10 percentage points on Brazilian products, falling from 50% to 40%.

The reversal, also announced this Friday by the White House, is not aimed at Brazil, but benefits important items on the agenda after months of pressure from the Brazilian government and producers affected by the so-called tariff, which had increased taxes on items with a strong weight in the Brazilian exports to the United States by up to 50%.

Trump issued an executive order reducing tariffs on beef, tomatoes, coffee and bananas, in a move amid growing inflationary pressure on food in the US — a factor considered by Brazilian businesspeople and members of the Lula government as the main trigger for Trump’s shift. Although coffee and meat are among the most important products shipped by Brazil to the United States, the White House announced the suspension of tariffs for all supplying countries, and not just for Brazil.

The exemptions are aimed at commodities, which, according to the White House, cannot be produced in sufficient quantities in the US to meet domestic demand. Hundreds of food products — including coconuts, nuts, avocados and pineapples — have been listed by the administration for tariff exemption. The tariff reductions are already in effect because the measure has retroactive effect from November 13th.

The announcement comes just one day after the meeting between Brazilian Foreign Minister Mauro Vieira and the United States Secretary of State, Marco Rubio. Vieira had already said that the Americans signaled that they would respond “very soon” to the first Brazilian proposal for a provisional agreement, formalized in early November in a high-level virtual meeting of members of the Brazilian government and the White House trade representative, Jamieson Greer.

The partial relaxation of tariffs does not fully meet Brazil’s request, which requests a temporary suspension, until the end of negotiations between the two countries, of the 50% tariff imposed by Trump on Brazilian exports in August, in addition to the end of diplomatic sanctions on Brazilian authorities and their families.

Despite this, it is a relevant measure for sectors that have historically been among those that export the most to the United States. Coffee, for example, was the third main product exported to the USA in 2024, in terms of value, with US$1.89 billion. Beef was the ninth most exported product category, with US$885 million.

The measure announced by the White House this Friday follows a series of contacts between Lula and Trump in recent months, including a personal meeting in Kuala Lumpur, during the ASEAN summit in October, when Lula insisted that the tariffs were affecting not only large exporting groups, but also integrated production chains between Brazil and the United States.

Before that, both had held telephone conversations and exchanged emissaries — including Chancellor Mauro Vieira and representatives from the State Department — to try to unlock the tariff escalation that marked the beginning of the new republican mandate.

The decision also reflects internal pressure on Trump, who was being charged by retailers, American slaughterhouses and coffee importers, including those represented by the National Coffee Association, who are facing increased costs and supply difficulties since the tariff.