Brazil, the world’s second largest agricultural exporter, is braced for extra punitive American rates because it has been one of the largest buyers of Russian diesel and fertilizer since the war started in Ukraine, enjoying hundreds of millions of dollars in fuel purchases.
President Donald Trump has already imposed 50 percent tasks on most Brazilian goods to tackle his demands that Brazil stopped the trial against his extreme right ally Jair Bolsonaro against coup costs and regulating American social media companies.
But after Trump had raised the rates over India, the largest market for Russian crude oil since 2023, and ordered officials to control the purchases of other Moscow oil products with a view to extra duties, believe Brazilian politicians and business leaders that the country could be the next goal.
“Confirm the last sanctions to India what could happen to Brazil,” said Carlos Viana, one of a group of Brazilian senators who traveled to Washington last month to discuss the trade. “Brazil buys large quantities of diesel [from Russia] And most fertilizers used in Brazilian agricultural production. ”
The trade between Brazil and Russia, his partner in the BRICS block of emerging countries, has more than doubled in the last five years and has reached $ 12.4 billion in 2024.
Sérgio Araujo, head of the Brazilian fuel importers’ Association Abicom, said there was a threat to more American rates. “Russia is an important supplier of a product [diesel] What we are strong, “he said.
Brazil imports at least a quarter of its diesel, which leads the trucks to move goods in the vast land, as well as tractors and machines on its farms. In the past, the US was the most important source of diesel imports, but after Russia invaded Ukraine and imposed the EU sanctions, an opportunity was opened to buy diesel cheaper from Moscow, energy experts said.
Discounts of a maximum of 30 percent were initially offered to Brazilian buyers by Russia, according to a senior industrial source, and they reacted eagerly.
The import of Brazil from Russia shot up from $ 95 million in 2022, the year in which the war started, up to $ 4.5 billion the following year and $ 5.4 billion last year. This made Brazil the world’s second largest buyer of Russian diesel after Turkey, said oil experts.
Alan Gelder, vice-president of refinage, chemicals and oil markets at Wood Mackenzie, said: “We estimate that the reduced Russian barrels have yielded the annual savings of Brazil of more than $ 500 million in 2023 and more than $ 400 million in Brazil has now become the import of the import of” “
The discount against US Gulf Coast Diesel on a base supplied peaked at 17 percent in August 2023, but according to the consultancy this year fell to a monthly average of 1 percent.
Brazilian leaders at both ends of the political spectrum have underlined the importance of good relationships with Russia. As president, Bolsonaro Putin just visited the supply of fertilizer just before the invasion of Ukraine, while the left -wing sitting, Luiz Inácio Lula da Silva, was one of the few international leaders who was the official celebrations in Moscow in May of the 80 -year Jubilee.
The position of Brazil with us is further complicated because it is already subject to some of the highest rates in the world after Trump’s 50 percent rate came into effect on Wednesday. So far, Lula has refused to speak with the American leader and says he does not want to suffer from “humiliation”. The punitive American rates imposed on India will only take effect on 27 August and have a short time before negotiation.
Ricardo Alban, head of the Brazilian lobby of the CNI industry, said: “Brazil is already in the epicenter of the tariff increases, so it must be clear.” His greatest care was fertilizers, an essential input for the agro-industrial export of the country such as soy, meat, sugar and coffee.
Brazil imports around 85 percent of the fertilizers it needs to grow food and Russia is by far the largest supplier, which, according to the official Brazilian trade data, delivers $ 3.5 billion in fertilizers in 2023.
Although fertilizers use natural gas based on nitrogen as a raw material, experts say that they are normally not considered petroleum derivatives. There are, however, that Trump could use a wider definition.
Tomas Pernias, analyst with raw materials brokerage Stonex, said that Trump’s last measure “is concerned that countries that are highly dependent on Russian fertilizers can be possible in future executive actions. Brazil, given the strong dependence on the Russian offer, is mainly exposed.”
While farmers are concerned about nutrients next year’s crops, fuel importers have a more direct concern about diesel.
“The worst thing is to imagine that Brazil will have to reduce its economic activity in the absence of a motorcycle driven by diesel,” said Arajo.
