Brazil's meat exports witness a shift as Mexico surpasses the US, securing the second spot in consumption.
In early 2025, Brazilian beef exports to the United States surged, making the US the second-largest market for Brazilian beef. However, a looming tariff hike by the US government threatens this trade relationship and is pushing Brazil to seek alternative markets.
The US imposed a tariff increase that could reach up to 50% on top of an existing 26.4% tariff, making Brazilian beef exports costly and less competitive in the US market. This tariff increase is expected to severely restrict Brazilian beef shipments to the US, potentially costing exporters about $1 billion in lost sales.
As a result, Brazilian beef exporters are beginning to look for new markets, especially in Asia. Countries such as Japan and China are emerging as key alternative buyers, capable of absorbing increased volumes. Additionally, some smaller markets in Central America, such as El Salvador, have recently approved imports of Brazilian beef, signaling new trade openings outside the US.
Meanwhile, US importers are shifting towards Australian beef to fill the void left by reduced Brazilian supplies caused by tariffs.
The monthly export of Brazilian beef in July 2022, up to the 28th, reached a record high of $1.352 billion, surpassing the result of June 2022 ($1.313 billion), setting a new decade high. Notably, China imported over $732 million worth of Brazilian beef between July 1 and 28, while Mexico spent $69 million on Brazilian beef during the same period.
The Lula government is actively trying to expand the list of exceptions to spare more companies from the republican tariff in the US market. Negotiations to renegotiate the tariff and open a dialogue channel between Minister Fernando Haddad, of the Treasury, and US Treasury Secretary Scott Bessent are expected to drag on for a long period.
The Lula government's position is that economic discussions should be maintained and even intensified, regardless of the financial sanctions imposed on Minister Alexandre de Moraes, of the STF (Supreme Federal Court). The government emphasizes the importance of maintaining open dialogue with the US to protect Brazilian businesses and workers.
In summary, the US tariff hikes on Brazilian beef are causing a significant shift in the destinations for Brazilian beef exports, with Brazil looking to Asia and Central America as key new markets. The US market share for Brazilian beef may decline, with Australia gaining prominence as a supplier to the US. The Lula government is actively negotiating to renegotiate the tariff and protect Brazilian businesses and workers from the potential economic impact of the tariffs.
Technology innovation could play a crucial role in helping Brazilian beef exporters adapt to the changing market landscape, as they seek to penetrate new markets in Asia and Central America. For instance, digital platforms can streamline trade processes, reducing costs and increasing efficiency. Additionally, advances in logistics technology could facilitate faster and more reliable shipments to these new destinations, thereby improving competitiveness.
