Brazilian Chemical Producers Association: US-Canada tariffs cause Brazil's chemical industry to lose hundreds of millions of dollars a year

By SKYSEVEN Chemical Technical Team · 2026-07-27

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Recently, the Brazilian Chemical Manufacturers Association Abiquim estimated that if the current export scale is maintained, the United States recently imposed a 25% tariff on Brazilian exports will generate an additional cost of about US $66 million in the chemical industry in the second half of this year, with an annual cost of US $0.133 billion.

The association stressed that the U.S. chemical sector has a significant competitive advantage with low ethane and natural gaseous costs. The new tariffs will not only ignore the reality of bilateral trade, however will also push up the United States' own costs. Some of the Brazilian chemical items subject to tariffs have insufficient or even blank production capacity in the United States, and U.S. companies can only switch to high-priced purchases from other countries. The impact assessment shows that of the 1177 HS6 items exported from Brazil to the United States, only 493 (42%) were exempted and 684 (58%) still need to be subject to new tariffs. while the exemption covers 64% to 71% of the export value, most export categories are still affected.

The most seriously affected are paint coatings, synthetic textile fibers, soap detergents and perfumes, with almost no items exempted, followed by organic chemicals, resins and elastomers, and inorganic chemicals and pesticides with relatively limited impact due to the high proportion of exemptions.

The Abiquim calls on the Brazilian government to take three priority measures: first, to minimize the burden on the affected industries through temporary relief mechanisms such as credit instruments and cost reduction and tax reduction; second, to continue negotiations with the United States to expand the list of exempted items; and third, to maintain and enhance existing trade defense measures to prevent greater unfair import shocks while exports decline.

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