*

U.S. surprised Brazilian companies with nearly 700

exemptions to

full tariff

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Brazil estimates tariff will impact 35.9% of sales to the

U.S.

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Critical products including coffee and beef absent from

exemption list

By Luciana Magalhaes and Ana Mano

SAO PAULO, July 31 (Reuters) - Brazilian companies

reacted with a mix of relief and doubt after the White House

surprised them on Wednesday with a list of nearly 700 exceptions

to the 50% tariff U.S. President Donald Trump imposed on the

country's exports from August 6.

While the exemptions cover major Brazilian exports such as

aircraft, iron ore, and orange juice, the country estimates that

35.9% of its sales to the U.S. by value will be hit by the new

tariff. Key exports like beef and coffee were notably absent

from the exemption list.

"We can say that it was a very surgical selection, insofar

as the United States chose products of greatest relevance to

them and also in Brazil's export agenda," said Gilberto Braga,

an economist at IBMEC university.

Andre Ribeiro Chaves, director of the Fergubel steel mill in the

state of Minas Gerais, said he would call back more than a

hundred workers he had put on leave.

"These exceptions gave us a certain comfort," he said.

But Abrafrigo, a beef lobby that represents Marfrig

and small Brazilian meatpackers, said the new tariffs

make sales to the U.S. impossible, adding that exporters may

lose $1.5 billion in sales of beef and byproducts through the

end of the year.

Still, even as some companies celebrated and others

calculated their losses, many remained confused about the

exemptions.

While some lumber products benefited from exclusions, for

example, companies in the sector are still trying to understand

which segments of the industry will be affected by the new

tariffs. Millpar, a manufacturer of wood-based products in

southern Brazil, said it was still unsure about whether to call

back the hundreds of workers it had put on leave.

In the U.S., the exemptions to the full tariff were

similarly welcomed.

The Consumer Brands Association expressed optimism with the

Trump administration's recognition of the scarcity of certain

natural resources, like eucalyptus and other wood pulp

products.

"We strongly encourage Brazilian officials to pursue a deal

with the Trump administration that achieves the same recognition

for coffee and other key inputs critical to the U.S.," said Tom

Madrecki, vice president of supply chain resiliency at the

association.

Many in Brazil remain hopeful for further exemptions.

"We believe there is scope for this flexibility, especially

since Brazilian beef is a staple for everyday consumption in the

U.S.," said Fabrizzio Capuci, the commercial director at

Naturafrig Alimentos, a beef exporter that has suspended

shipments to the United States.