Trump's tariff hike threatens 140 jobs in Rio Grande do Sul, says Fiergs.

247 - The decision by the United States government, under President Donald Trump, to exempt nearly 700 imported products from tariffs will have a limited effect on the economy of Rio Grande do Sul. According to an assessment by Fiergs (Federation of Industries of the State of Rio Grande do Sul), the measure only covered a small portion of the state's exports, which keeps the risk high for the state's industry.

“Rio Grande do Sul was the most affected. Only 14,3% of exports benefited from the exemption. That’s 140 jobs that could be impacted,” warned the entity’s president, Claudio Bier, this Friday (1), according to the Folha de S. Paul"As long as this 50% tariff is in effect, our industries will have to seek new markets or adapt to the domestic market. They will have to reinvent themselves," he said.

Fiergs and the National Confederation of Industry (CNI) are working with the federal government to adopt measures to mitigate the effects of the taxation on exporters. According to Guilherme Scozziero, coordinator of the Labor Relations Council of Fiergs, the proposal is to reactivate emergency instruments already used during the pandemic and after the floods of May, such as the suspension of employment contracts.

“We have mechanisms like collective vacations and time banks, but that’s a palliative measure. We need something more effective to safeguard jobs,” Scozziero argued. He maintained that, without robust measures, there will be “very high unemployment.” Even so, he stressed that layoffs are the last resort. “Industries always try alternatives to cushion the impacts,” he added.

Despite a slight increase of 0,6% in industrial performance in 2024, reflecting a recovery after long months of crisis caused by the floods, the scenario with the tariff increase is challenging. The state government initially projected a loss of R$ 1,9 billion in GDP, but after the announcement of the exempted items, the estimate was revised to R$ 1,5 billion.

According to the report, the metallurgical sector is the most vulnerable: US$324,9 million worth of goods were exported to the US in the year, representing 35,8% of the segment's foreign sales. Among the affected items are boilers, tanks, tools, knives, and metal cans. The weapons manufacturer Taurus, for example, sent 85,9% of its production to the American market—the equivalent of US$170,2 million.

Next come the machinery and electrical equipment industries (US$114,6 million, or 42,5% of the sector's total) and the footwear segment, which exported 19,4% of its production, equivalent to US$176,2 million. Since a large portion of these shoes are manufactured for American brands, relocating production to other markets may be difficult. "You don't build an export market overnight," said Bier.

The president of Fiergs (Federation of Industries of the State of Rio Grande do Sul) argued that the Brazilian government should adopt a posture of dialogue with the US administration, avoiding friction that could generate new sanctions. Bier emphasized the unpredictability of the current US president. “We're poking a lion with a short stick. The United States has a president who, when provoked, reacts with even more force. Patience and negotiation are necessary.”

Bier avoided commenting on the political arguments used by Trump to justify the adoption of the tariffs, which included criticism of the Brazilian Supreme Court, especially the actions of Minister Alexandre de Moraes in the trial of Jair Bolsonaro (PL) and the defendants for the coup attempts of January 8, 2023. "We made the decision not to get politically involved in this crisis, precisely so that the industry can be a mediator," he concluded.

Meanwhile, Governor Eduardo Leite (PSD) announced the release of R$100 million in credit for exporting companies, starting this Monday (4). Fiergs has already requested that this amount be doubled.