Brazilian micro, small, and medium enterprises are lobbying U.S. officials in Washington, D.C., to oppose a new tariff regime on Brazilian exports.
The measures threaten the competitiveness of smaller firms that lack the capital of larger corporations to absorb sudden cost increases. Because these businesses are vital to the national labor market, a significant drop in exports could trigger broader economic instability in Brazil.
U.S. officials proposed the tariffs in early 2024 to protect domestic industries and address trade imbalances. The proposed duties vary by product, with some reports citing a 25% increase [4] while others indicate tariffs could reach 50% on certain goods [5].
Hearings in Washington began on Monday, the 6th [6], where Brazilian representatives are attempting to mitigate the impact of the "tarifaço." The sector is particularly vulnerable because micro and small enterprises are responsible for 60% of jobs in Brazil [1].
While these smaller firms represent 40% of Brazilian exports to the United States [2], they account for only 1.6% of the total value exported to the U.S. market [3]. This disparity suggests that while many individual businesses are involved in the trade, their individual profit margins are slim, making them more susceptible to price hikes caused by import duties.
Industry representatives, including those from the plastics sector, said the new regime could disproportionately affect smaller operations compared to industrial giants. The current lobbying efforts aim to secure exemptions or lower rates to prevent a wave of business failures among Brazil's export-oriented SMEs.
“Micro and small enterprises are responsible for 60% of jobs in Brazil.”
The disparity between the volume of exporting companies and the total value of goods exported highlights a systemic vulnerability in Brazil's trade architecture. If the U.S. implements these tariffs, the economic shock will not be felt as a loss of total trade value, but as a widespread employment crisis, given the high percentage of jobs provided by the affected small-business segment.
