Tariff Reversal Highlights U.S. Dependence On Brazilian Cellulose

(MENAFN- The Rio Times) The United States lifted a 10% tariff on Brazilian cellulose through an executive order signed by President Donald Trump on September 5, 2025.

This reversal, effective September 8, 2025, exempts three specific categories under Harmonized System codes that account for over 90% of Brazil's cellulose exports to the U.S.

The decision removes the duty imposed since April 2025, while leaving higher tariffs on other wood products intact. American manufacturers depend on Brazilian short-fiber cellulose, derived from eucalyptus, for producing tissue papers like toilet paper, facial tissues, and diapers.

Brazil exported 2.8 million tons to the U.S. last year, representing 78% of American consumption and 15% of Brazil 's total cellulose shipments.

The tariff had raised costs, prompting U.S. clients to lobby for relief alongside Brazilian efforts, including hiring lawyers and maintaining supplier dialogues.

Industry leaders welcomed the change. Paulo Hartung, president of the Brazilian Tree Industry Association (Ibá), called it a positive outcome that underscores diplomacy's value.



He noted ongoing negotiations for revisions on papers at 50% (10% base plus 40% additional) and wood panels like MDF at 40%.

Rafael Barisauskas, a Latin America economist at Fastmarkets, viewed it as beneficial for both sides, as taxing pulp inflated U.S. production expenses.

Export data reflects the tariff's toll. From January to May 2025, U.S.-bound cellulose fell 15.2% in value and 8.5% in volume, with May alone down 35% in value, per the Brazil-U.S. Chamber of Commerce.

Overall Brazilian cellulose exports from January to August 2025 totaled $6.9 billion, up 1.4% in value and 15.6% in quantity year-over-year, according to the Ministry of Development, Industry, Commerce and Services.

Suzano, the world's largest short-fiber producer, derives 15-19% of net sales from the U.S. Its second-quarter 2025 report showed sales volume up 23% quarter-over-quarter and 28% year-over-year, aided by the new Ribas do Rio Pardo mill.

Average price per ton was $555, down 20% from Q2 2024 due to market pressures. Post-tariff, Suzano hiked prices: $20 per ton in Asia, then $80 in Europe and the U.S.

Itaú BBA reported China's bleached hardwood kraft pulp prices at $512.7 per ton by late August, a $20 rise, but warned of risks from weak paper margins. This episode fits broader U.S.-Brazil trade strains.

The initial 10% reciprocal tariff in April addressed persistent U.S. trade deficits. July's 40% addition responded to perceived threats, including judicial actions against former President Jair Bolsonaro and censorship affecting U.S. firms.

Brazil contests these at the World Trade Organization and considers retaliation, while prioritizing exporter support like extending drawback deadlines.

The reversal illustrates mercantile realities: protectionism can disrupt essential imports, forcing adjustments. U.S. exemptions for items like orange juice, aircraft, and energy reflect pragmatic balancing.

For Brazil, the cellulose sector supports rural jobs and billions in revenue; for the U.S., it curbs inflation in household goods.

Tariff Changes – Summary Table



Product
Old Tariff
New Tariff
Key Impact

Cellulose	10%	0%	Boosts exports, cuts US costs
Papers	50%	50%	Limits access, raises prices
Panels	40%	40%	Ongoing talks needed

MENAFN11092025007421016031ID1110047985