Key Points
The Trump administration has launched a new phase in its trade policy. On July 15, the Office of the U.S. Trade Representative (USTR) announced a 25% Section 301 tariff on a wide range of Brazilian imports, citing unfair practices in digital payments, intellectual property, market access, and related areas.
The duties took effect on July 22 and apply to thousands of products, while certain items—including coffee, beef, orange juice, and aerospace components—were excluded. The move creates both opportunities and risks for U.S. companies; two firms worth monitoring are Nucor and Embraer.
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1. Nucor
One potential beneficiary is North Carolina‑based Nucor (NYSE: NUE). Brazil ranks among the top foreign suppliers of steel‑related goods to the United States, especially pig iron, a crucial feedstock for electric‑arc furnaces. Although some steel products were spared from the new tariffs because they already fall under separate Section 232 duties, the broader measure could still steer buyers toward domestic sources where feasible, offering a tailwind for Nucor.
Nucor is the largest steel producer in North America and continues to invest billions of dollars to expand capacity. Its downstream operations also provide exposure to construction, infrastructure, manufacturing, and energy sectors.
While tariffs—paid by importers—alone will not dictate Nucor’s future earnings, steel demand hinges on industrial activity and construction spending. Nevertheless, trade barriers that curb import competition have historically bolstered domestic pricing and plant utilization. If the current tariff framework persists, Nucor could see indirect benefits.
2. Embraer
On the flip side, São Paulo‑headquartered Embraer (NYSE: EMBJ) derives roughly 60% of its revenue from North America, making U.S. market access vital.
The final tariff schedule exempts civil aircraft and hundreds of aerospace‑related components, limiting the direct impact on Embraer’s U.S. operations. This exemption underscores the deep integration of aerospace supply chains between the United States and Brazil.
Still, the company is not wholly insulated. Trade disputes seldom stay static; additional tariffs, retaliatory actions, or wider restrictions could heighten uncertainty for future aircraft orders or complicate cross‑border supply chains. Even with aerospace exemptions intact, prolonged trade tensions could dampen investor sentiment toward Brazilian exporters in general.
Exposure to Brazil
Tariffs rarely yield clear‑cut winners or losers overnight. Many firms can respond by shifting suppliers, renegotiating contracts, or passing on higher costs to customers. Others gain simply because foreign competitors become less price‑competitive.
For the time being, companies with the greatest exposure to Brazilian imports—or those that compete directly against them—are likely to experience the most pronounced effects. Nucor stands to gain if domestic steel demand shifts toward U.S. producers, while Embraer may continue operating largely unimpeded as long as the aerospace carve‑outs remain in place.
A critical question for investors is whether Brazil will retaliate and whether this move signals the start of a broader expansion of Section 301 tariffs.
