What is the impact of Trump's taxation on large industries in SC?

Industry in Santa Catarina is on high alert following U.S. President Donald Trump's announcement that he will increase import tariffs on Brazilian products to 50% starting August 1. Two companies, in particular, are highlighted by financial market analysts as the most exposed to the U.S. surcharge: WEG and Tupy .

According to BTG Pactual, the US represents around 25% of WEG's total sales, with exports to the North American country "becoming a key source of growth and profitability in recent years", concentrated especially in the electrical power machinery sector , such as transformers.

The United States is dependent on the foreign market for transformers—80% of which is imported. With the surcharge, the bank estimates that "other exporters such as South Korea, Mexico, and India could gain market share," forcing WEG to expand production at its Mexican factory to mitigate the financial impact.

XP Investimentos also highlighted the exit via Mexico, but it would have an impact on the Brazilian economy, particularly in Santa Catarina. XP estimates that approximately 9% of its export revenue comes from shipments to the US, which would also force the company to adjust prices to compensate for the 50% tariff. Gazeta do Povo contacted WEG, but the company said it would not comment on the matter because "the scenario is still marked by uncertainty."

Tupy, in turn, derives 13.9% of its revenue from exports to the United States—the company has a factory in Joinville and works with metallurgy for the automotive industry . XP Investimentos highlighted "negative impacts" on Tupy due to its exposure to the US, even if "limited." Gazeta do Povo reached out to Tupy for comment, but did not receive a response by the time this article was published. The company remains open for comment.

Last year, Santa Catarina exported US$1.74 billion to the United States, with over 70% coming from the industrial sector. And in the first six months of this year alone, US$847.2 million were exported to the US.

The Federation of Industries of the State of Santa Catarina (Fiesc) stated in a statement that the surcharge "will severely harm" shipments to the United States. "The implementation of the 50% tariff announced this Wednesday compromises the competitiveness of Santa Catarina products, since competing countries in sectors relevant to Santa Catarina's export agenda may be subject to much lower rates," reinforced Fiesc president Mario Cezar de Aguiar.