The introduction of US duties on Brazilian timber may have a negative impact on transit cargo transportation

The introduction of US duties on Brazilian timber may have a negative impact on transit cargo transportation

    Recent U.S. Article 301 decisions imposing additional duties on Brazilian wood products could seriously affect shipments already on the way. The short transition period means that a significant portion of the cargo shipped to the United States in recent weeks will be subject to higher duties upon arrival at ports. Brazilian exporters face cumulative duties of up to 37.5%, with almost 90% of the sector's exports subject to the new restrictions.

A short transition period creates logistical chaos

    Head of the Brazilian Association of Wood Processing Enterprises (ABIMCI) Paulo Pupo stated that the short implementation period means that a significant amount of cargo already en route to the United States will be subject to higher duties upon arrival.

"The deadlines announced by the US authorities were extremely tight. The woodworking industry operates through a highly organized logistics network, and significant volumes of containerized cargo are shipped to the United States every month. Although it is difficult to accurately estimate how much of the cargo currently in transit will be affected, a significant portion of the cargo is likely to be subject to duties, which will create serious logistical problems" — Paulo Pupo, Head of ABIMCI

    As a result, exporters and importers will have to renegotiate contracts while managing increasingly complex logistics operations.

The amount of duties: up to 37.5%

    Although duties ranging from 10% to 12.5% were widely applied in global markets, the additional 25% duty on Brazilian goods increases the overall customs burden to 37.5%. The woodworking sector is among the most affected industries: One industry association estimates that almost 90% of the sector's exports are subject to duties.

Comparison with previous measures:
    Fastmarkets economist Emerson Paradis said that imports of Brazilian plywood and medium-density fiberboard (MDF) to the United States decreased by almost two-thirds between August 2025 and February 2026 compared with the same period a year earlier. Shipments of specialized products decreased by more than 80% over the same period.

Key duty rates for Brazilian wood products:

Market reaction: strategy review and cost sharing

The volatility of the exchange rate further increases uncertainty in the market. Murilo Freimuller, a specialist in foreign trade at Moneycorp Bank, noted that there has already been a noticeable change in trading activity, as companies have become more cautious about commercial solutions.

Customer reaction:
    Some American buyers have demonstrated a willingness to partially cover the additional costs rather than replace long-established suppliers. However, Brazilian manufacturers are reviewing their commercial strategies and production plans in an effort to limit potential market share losses to regional competitors, including Chile and Uruguay.

Price pressure:
    To remain competitive, prices for Brazilian profile softwood products will probably need to decrease by about $25-30 per thousand boards over the next three weeks.

Reduction of production

    The Brazilian exporter reported that the volume of production in the segment of profiled products and joinery has already decreased by about 50% since the announcement of the first wave of duties in 2025. Other industry participants said that voluntary production cuts could spread to other segments of the woodworking industry as companies seek to avoid oversupply in alternative export markets.

Key implications for Brazilian exports:

Importance for the global market

1. - Brazil is losing market share in the United States. The duties make Brazilian products less competitive compared to supplies from Chile, Uruguay and other South American countries.
2. - Reduction of imports to the USA. As the experience of 2025 has shown, imports of Brazilian plywood and MDF may decrease by two thirds, which will change the supply structure in the American market.
3. - Logistical collapse in the short term. The short transition period creates chaos for goods already in transit. Exporters and importers are forced to review contracts on an emergency basis.
4. - Increased competition in alternative markets. Brazilian exporters will look for new markets (Asia, Europe, the Middle East), which will increase competition in these markets and may lead to lower prices.
5. - Margin pressure. Reducing prices by $25-30 per thousand boards to remain competitive means a serious squeeze on margins for Brazilian manufacturers.

Forecast

    In the short term, Brazilian exports of wood products to the United States will decrease. Manufacturers will be forced to reorient to other markets, which will increase competition in Asia and Europe. The long-term consequences depend on whether the duties remain in place or are reviewed.

The key conclusion

    The introduction of US duties on Brazilian wood up to 37.5% is a serious blow to Brazilian exporters, especially in the segments of plywood, MDF and profile products. The short transition period creates additional logistical problems, affecting shipments already in transit. Brazilian manufacturers are forced to review production plans and look for new markets, which will increase competition at the global level.

Tags: #USA #Brazil #wood products #duties #transit shipments #foreign trade #plywood #MDF #profile products