Once upon a time, on a fateful day in early April, the bold and unpredictable President of the United States, Donald Trump, made a significant announcement at the White House. He declared a widespread increase in tariffs for imports from the rest of the world, triggering a global stock market crisis. This executive order signed by the Republican president imposed a 10% rise in the base customs cost and higher rates on rival countries like China. The new tariffs came into effect three days later, amidst market turmoil and lingering uncertainty.
Fast forward two months, and Chilean companies exporting to the United States are now tallying up the impact of the 10% tariff hike on their initial balances. This increase excluded products like copper, Chile’s primary export to the U.S., as well as wood and other goods not available in that market. The assessment varies across industries, but all acknowledge the impact and highlight the high level of uncertainty they face.
After copper exports valued at US$5.6 billion in 2024, comprising 34% of the total basket, Atlantic salmon (fresh, refrigerated, or frozen) stands as the second-highest export with over US$2 billion, followed by fresh grapes at nearly US$700 million at the end of last year. Among the top 15 exports to the U.S. are also products such as mandarins, blueberries, and bottled wine, which has regained ground in that market with over US$125 million in 2024.
While concrete figures on the impact of these two months are not yet available, all sectors consulted acknowledge that Trump’s decision has forced companies to deploy strategies to minimize the impacts. These strategies primarily focus on exploring new markets and diversifying their export destinations. Executive travels to other countries have become common in recent months, reflecting the industry’s unease and desire to expand market portfolios.
Antonio Walker, the president of the National Agriculture Society, notes, “What affects us the most is the uncertainty. That’s why I’ve seen a lot of concern in our sector about expanding market portfolios. These two months I’ve seen many trips to China, India, Japan, the Association of Southeast Asian Nations (ASEAN)… a lot of interest in opening up the Middle East, seeing what’s happening in North Africa. This is a concrete effect of these two months, a country preparing to see what news we have in the future, as it’s an ongoing development.”
The uncertainty among exporting companies doesn’t seem to be easing. Apart from the fluctuating and uncertain decisions in the U.S. in recent weeks, the Chilean government postponed a crucial meeting (scheduled for June 11 and 12 under the Chile-U.S. FTA) to negotiate the removal of the 10% tariff affecting local producers. While the reasons for the postponement were not elaborated on, the Subsecretariat of International Economic Relations downplayed the event’s delay, emphasizing previous meetings between the parties.
Although no impact has been detected in the official April export balances for various shipments to the U.S., both the government and the business world in Chile exercise caution and await May’s results for a more thorough evaluation. The government reveals that many export decisions made in April were planned months prior, without the knowledge of the impending 10% tariff increase to the U.S. However, Walker suggests that exports of table grapes, for example, could be experiencing reduced demand in recent weeks, hinting that citrus products may also be affected due to seasonality.
Loreto Seguel, CEO of the Salmon Council, provides insights into the salmon industry. While April figures show no deterioration in salmon exports to the U.S. (reaching US$235 million, the highest level this year), she anticipates potential future impacts. Seguel mentions the industry’s resilience and diversification, highlighting how the tariff increase has reinforced the industry’s diversification drive. She underscores the importance of analyzing official export data to understand the current impact fully.
Arturo Clément, President of SalmonChile, acknowledges the challenging landscape, noting a weakened demand for Chilean salmon in the U.S. following the tariff implementation. He emphasizes the need for coordinated efforts between the public and private sectors to eliminate the 10% tariff and address internal administrative barriers affecting the industry’s efficiency and competitiveness.
The wine sector, which has seen a resurgence in the U.S., remains cautious. In April, the U.S. became the second-largest recipient of Chilean wine shipments, with a 15% increase in value. Industry sources highlight the market diversification of Chilean wine exports and mention companies leveraging the U.S.-Canada tariff dispute to enhance their presence in Canada. Viña Concha y Toro emphasizes the significance of its U.S. subsidiary in mitigating risks and maintaining flexibility, focusing on long-term relationships with distributors and seeking operational efficiencies to stay competitive in volatile and uncertain scenarios.
As the export landscape continues to evolve amidst trade tensions and global economic shifts, Chilean exporters navigate challenges with agility and strategic foresight, seeking to adapt, diversify, and innovate to sustain their market positions and drive growth in an increasingly complex international trade environment.
Leave feedback about this