Right now, it feels like there is a new trade policy update coming out of Washington almost every day, creating a shifting landscape for Latin American exporters. For Brazilian businesses that ship to the United States—Brazil's second-largest trading partner—it is a period filled with operational uncertainty. But do not fret.
This guide shares key advice to help small and medium enterprises (SMEs) navigate these international trade shifts, protect their margins, and keep their goods moving through customs with as little disruption as possible.
In simple terms, tariffs are taxes or duties that a government places on imported goods entering its domestic market.
The main goal of tariffs is twofold. Firstly, they protect domestic industries—by making foreign goods more expensive, tariffs help local businesses compete more effectively against international imports. Secondly, they generate revenue for the government, which is particularly crucial in nations that manage strict trade balances.
US tariffs are paid to the U.S. Customs and Border Protection (CBP) agency at ports of entry across the country. They vary depending on the Harmonized System (HS) classification code, the product's assessed value, the country of manufacture, and the associated freight charges for the commodities involved.
For a Brazilian exporter, ensuring your product's Nomenclatura Comum do Mercosul (NCM) code is accurately translated to the correct US HS code is vital to prevent overpaying duties.
Responsibility for paying import tariffs is determined upfront by the agreed Incoterms® (International Commercial Terms) established between the Brazilian shipper and the international recipient. Incoterms® are a uniform set of international trade standards that explicitly outline who is responsible for transportation, cargo insurance, export and import formalities, and the payment of duties and taxes.
The choice of Incoterms® dictates the financial friction your buyer experiences:
Delivered Duty Paid (DDP): The Brazilian seller assumes all risks and costs, including US import tariffs and customs clearance fees. This is the preferred method for e-commerce brands looking to provide a seamless checkout experience for US consumers.
Delivered Duty Unpaid (DDU) / Delivered At Place (DAP): The US buyer or importer of record is responsible for paying all tariffs and clearing customs before the carrier releases the goods.
Establishing these terms clearly in your sales contracts ensures all parties meet their legal obligations without unexpected delivery delays.
US import tariffs directly reduce the price competitiveness of Brazilian goods and squeeze the profit margins of local SMEs by increasing total landed costs.
While global trade discussions often focus on massive trade disputes between the US and China, evolving US policy adjustments regularly touch key Latin American supply chains, impacting industries ranging from steel and aluminum to agricultural derivatives, textiles, and specialized manufactured components.
These sudden trade measures have disruptive effects on foreign SMEs, who often operate with tighter cash flows and less operational flexibility than large multinational corporations.
Policy changes are frequently rolled out quickly by international governments, leaving Brazilian exporters scrambling to adapt while simultaneously trying to meet US consumer expectations for fast, reliable delivery.
Furthermore, broader global trade tensions indirectly drive up international ocean and air freight costs across South American corridors.
When trade restrictions tighten on major routes like Asia-to-US, global shipping lines frequently reroute vessels or adjust container allocations, creating capacity bottlenecks and driving up spot rates for routes departing from major Brazilian hubs like the Port of Santos or Guarulhos Airport.
Tariff-related customs delays or unexpected cargo inspections also trigger secondary logistics penalties, including port demurrage fees, airport warehousing charges, and unforeseen administrative costs.
For a Brazilian SME, the most pressing strategic question is whether to absorb these increased tariff costs internally—which can damage profitability—or pass them on to North American buyers, which risks making your products less competitive against domestic US alternatives.
To lessen the impact of foreign tariffs introduced this year, Brazilian businesses should take proactive, strategic steps to diversify their operations. Here is how you can insulate your business from international trade volatility:
Start by conducting a comprehensive audit of your export pipeline to pinpoint areas of exposure to shifting US customs policies. Key questions to explore include:
Which components, raw materials, or finished goods do you regularly export to the US?
What are the exact US HS classification codes for your products, and are they currently subject to Section 301, Section 232, or anti-dumping duties?
Are any of your primary manufacturing inputs imported into Brazil from countries that face heavy global penalties, which could affect your product's rule-of-origin status?
Using simple spreadsheets or integrated ERP tools popular with Brazilian SMEs, such as Bling or Tiny, allows you to track and assess where your financial risks lie. This clarity helps your business anticipate international cost increases and adjust your pricing or procurement strategies before customs disruptions impact your bottom line.
Rather than relying heavily on a single country – particularly those subject to high tariffs – your business can:
Diversification will not only help your business reduce tariff exposure but also enhance resilience against other disruptions like pandemics or natural disasters.
There’s a big world out there! If US tariffs are cutting into your profit margins, you can consider other markets:
By not relying solely on the US, you’ll reduce your exposure to tariff-related risks and open up new revenue opportunities elsewhere.
Strong partnerships can offer more flexibility and better pricing during turbulent times:
Reliable partners are crucial when adapting logistics strategies or when immediate shifts in supply are needed.
US tariff policies change quickly and often with minimal notice to foreign suppliers. Brazilian SMEs engaged in cross-border trade need to:
Monitor official government announcements directly from the Office of the United States Trade Representative (USTR) and the US Department of Commerce.
Review regular trade advisories published by the Brazilian Ministry of Development, Industry, Commerce and Services (MDIC) and local industrial trade associations.
Consult with qualified trade compliance experts or international express carriers to decode complex changes in international duty structures.
Staying informed allows your business to adapt quickly, whether that means adjusting your production volumes, altering your retail pricing models in US dollars, or accelerating shipments before a new tariff takes effect.
In general, responsibility for payment of the tariff will be agreed between the shipper and recipient upfront. This forms part of the shipment’s Incoterms® – a uniform set of international trade standards that outline who is responsible for transportation, cargo insurance, export and import formalities, payment of duties and taxes, and at what point risk transfers from the seller to the buyer.
Key reasons include:
Some options include:
For fast and reliable international shipping, open a DHL Express Business Account.
Share
