Little impact on Brazil polymers from US tariffs

: Petrochemicals
25/04/03

The overall 10pc tariffs imposed by the US on Brazilian exports on 2 April are unlikely to significantly impact Brazil's polymers industry, as polymers exports to the US are minimal.

Brazil's polypropylene (PP) exports to the US during January-February 2025 hit 1,964t, down 22pc when compared with the same period of 2024, according to data from Brazilian trade ministry database Comexstat. The figure represents just 5pc of Brazil's total PP exports in the period, with the US ranked at the 12th most important destination.

In polyethylene (PE), Brazil exported 1,335t to the US during Jan-Feb 2025, down 30pc year over year. This represents 1pc of Brazil's PE exports in the first month, with the US ranked 18th.

There were no exports from Brazil to the US related to polyvinyl chloride (PVC), polyethylene thereftalate (PET), expanded polystyrene (EPS), and acrylonitrile butadiene styrene (ABS) in January and February.

However, Braskem, a Brazilian petrochemical company and the largest producer of thermoplastic resins in the Americas, felt the tariffs' impact on its shares today. Braskem's shares experienced a decline at the São Paulo stock exchange B3, with the stock trading at BRL 10.31 ($1.84) at noon, down 2.46pc from its previous close of BRL 10.57. In intraday performance the stock opened at BRL 10.50, reaching a high of BRL 10.84 and a low of BRL 10.30. The movement reflects ongoing market volatility and investor sentiment surrounding the company.

The Brazilian government criticized the US decision, describing the additional 10pc tariff as a violation of the country's commitments to the World Trade Organization (WTO). The measure adds to previous 25pc tariffs imposed on steel, aluminum, and automobiles, further complicating Brazil's trade portfolio with the US.

US trade surplus

According to Brazil's foreign relations ministry (MRE), US government data indicates that the US achieved a $7bn trade surplus with Brazil in goods in 2024. When including services, the surplus totaled $28.6bn, making Brazil the third-largest contributor to the US's global trade surplus. Over the past 15 years, the US has consistently recorded significant surpluses with Brazil, amounting to $410bn in goods and services.

The US rationale for the 10pc tariff — to restore balance and achieve "trade reciprocity" is inconsistent with the reality of enduring trade surpluses, the ministry said. In response, Brazil intends to collaborate with its private sector to protect domestic workers and companies while defending the multilateral trade system.

The Brazilian government stated that it remains open to dialogue with the US to reverse the tariffs and minimize their harmful effects. At the same time, it is evaluating all possible actions to ensure reciprocal trade relations, including appealing to the WTO.

The government highlighted the recent approval of the Economic Reciprocity Bill by the Congress, reinforcing its willingness to adopt reciprocal measures if necessary.

Anti-dumping duties possible

The Brazilian government on 14 November opened a possible measure relating to an anti-dumping investigation against PE resins imported from the US and Canada. Trump's promises to protect US industries have created uncertainties about whether Brazil would want to move forward with PE anti-dumping duties, but now it could be used as a possible retaliation for the new tariffs.

In 2024, total PE imports in Brazil reached 1.959mn t, increasing 40pc year on year, with North America representing 77pc of market share.

By Fred Fernandes and Terezinha Miranda

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