Brazilian wood exporters are under mounting pressure as sweeping U.S. tariffs begin to disrupt trade flows, (apparently) prompting widespread order cancellations and threatening shutdowns across key production regions. The latest bulletin from the International Tropical Timber Organisation (ITTO) paints a grim picture, reporting that companies in Brazil’s South, Southeast, and Amazon regions are already contending with rising uncertainty and operational strain.
The disruption follows a Section 301 investigation launched last month by the Trump administration, targeting Brazil’s trade practices and environmental record. As reported by Wood Central last month, the probe will assess whether the Lula government has engaged in unfair trade policies, preferential tariffs, corruption, and illegal deforestation—allegations that could further complicate bilateral relations.
“At President Trump’s direction, I am launching a Section 301 investigation into Brazil’s attacks on American social media companies as well as other unfair trading practices that harm American companies, workers, farmers, and technology innovators,” said Jamison Lee Greer, Trump’s trade representative. “USTR has detailed Brazil’s unfair trade practices that restrict the ability of U.S. exporters to access its market for decades in the annual National Trade Estimate (NTE) Report. After consulting with other government agencies, cleared advisers, and Congress, I have determined that Brazil’s tariff and non-tariff barriers merit a thorough investigation, and potentially, responsive action.”
The U.S. has long been a critical market for Brazilian manufacturers of flooring, panels, and mouldings. But with tariffs now reaching as high as 50 per cent, exporters warn the financial strain is untenable.
“50% US tariffs cannot be absorbed,” companies say, underscoring the urgency of the crisis. Industry groups argue that alternative markets cannot replace the volume of exports to the U.S. They are urging the Brazilian government to pursue trade arrangements similar to those secured by competitors in Indonesia, Chile, and Vietnam. As it stands, Brazilian wood products face an additional 40% tariff, with only a limited number of items exempt. Even those exemptions are under scrutiny. “Tropical sawn timber does appear to be exempt from the new duties,” the ITTO bulletin notes, though it warns that concerns remain that exemptions could be further revoked.
- For further reporting on illegal logging and organised crime in the Amazon, see Wood Central’s special feature from August 2024.
