Key Takeaways
- Former Brazilian President Jair Bolsonaro was sentenced to over 27 years in prison by the Supreme Court for attempting a coup, a ruling that is expected to deepen political divisions in the nation.
- The United States, via an executive order on September 5, 2025, removed most Brazilian nickel iron and pulp exports from tariffs, easing trade tensions and benefiting key Brazilian industries.
- This tariff relief follows earlier U.S. duties, including a 50% levy imposed in July, which were partly linked to perceived political persecution against Bolsonaro by the Brazilian government.
- The removal of tariffs on pulp is particularly significant for companies like Suzano (SUZ), the world's largest short-fiber producer, which derives a substantial portion of its net sales from the U.S.
Brazil is navigating a period of heightened political and economic flux following a landmark legal decision and a significant shift in U.S. trade policy. Former President Jair Bolsonaro was sentenced to 27 years and three months in prison on Thursday by a panel of the Brazilian Supreme Court, found guilty of orchestrating an attempt to overturn the 2022 election results. This conviction, which saw four of five justices ruling against him on five counts, marks a pivotal moment for Brazilian democracy and is likely to intensify the country's already deep political polarization. Bolsonaro, who is currently under house arrest, plans to appeal the verdict to the full Supreme Court.
Simultaneously, the U.S. has taken steps to de-escalate trade tensions with Brazil. On September 5, 2025, President Donald Trump signed an executive order that removed tariffs on most Brazilian nickel iron and pulp (cellulose) exports, effective September 8, 2025. This executive order specifically revised Annex II of the reciprocal tariffs system, adding critical minerals like nickel to the list of exempt goods and lifting a 10% tariff on Brazilian cellulose. This move is a reversal of earlier U.S. trade measures, which had seen tariffs on Brazilian imports escalate significantly.
In July 2025, the U.S. had imposed an additional 40% emergency surcharge on Brazilian goods, bringing the total tariff to 50% for many products, citing concerns over "national security, foreign policy, and economy" and explicitly mentioning actions by the Brazilian government against former President Bolsonaro. Prior to this, a 10% reciprocal tariff had been in place since April 2025. While the July order had already exempted certain products like pig iron and wood pulp from the additional 40% duty, the September 5th order appears to have provided a more comprehensive removal of tariffs for pulp and nickel.
The removal of tariffs on Brazilian cellulose is particularly impactful for the pulp industry. Brazil is a dominant supplier to the U.S., accounting for 78% of American cellulose consumption last year. The previous tariffs had negatively affected trade, with U.S.-bound cellulose exports seeing a 15.2% fall in value and an 8.5% decrease in volume from January to May 2025. Industry leaders, including Paulo Hartung of the Brazilian Tree Industry Association (Ibá), welcomed the change, highlighting its benefits for both U.S. manufacturers and Brazilian exporters. Suzano (SUZ), the world's largest producer of short-fiber pulp, is a key beneficiary, as the U.S. market accounts for 15-19% of its net sales. Negotiations are reportedly ongoing for revisions on tariffs for other products, including papers (currently at 50%) and wood panels like MDF (40%).
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.