00:00Hidden inside tractors, trucks and wind turbines are hundreds of parts made in this Brazilian
00:04factory.
00:05Now U.S. tariffs are threatening the business behind them.
00:08Thousands of kilometers from Washington, factories in the city of Piracicaba, located in Brazil's
00:13southeast, are already paying the price.
00:15Among the companies affected is TechParts Brazil.
00:18The company makes over 800 critical components for machinery used on farms, in the car industry
00:23and in generating wind power.
00:25Everything exported to the U.S. by manufacturers in this sector has been fully affected by
00:31the tariffs.
00:32TechParts doesn't sell much directly to the U.S., but many of its customers do, including
00:38heavy equipment giant Caterpillar.
00:40Altogether, the company estimates that around 15 percent of its production has been affected
00:44by the tariffs, and the consequences are already visible.
00:48We've seen a steady decline in our order backlog, so there's a real concern about
00:53preserving jobs.
00:55A few months ago, we had to reduce our workforce.
00:58We already made some layoffs.
01:01Before the tariffs, TechParts employed around 300 workers.
01:04Today that number stands at roughly 250.
01:07Fifty jobs have already been lost as orders declined.
01:10While the company's outlook for 2026 remains unchanged, projections for 2027 have already been
01:16revised downward by around 20 percent.
01:18And economists warned that the latest tariffs are likely here to stay, making them far more
01:23difficult to reverse than previous trade measures.
01:27The issue with the new tariffs is that reversing them will be very difficult, requiring extensive
01:34negotiations and significantly more time than the previous measures, because it's not enough
01:41for the U.S. president simply to revoke them.
01:48That means manufacturers like TechParts may need to adapt to a new reality rather than simply
01:53wait for Washington to change course.
01:55We're looking for new market segments that we previously didn't serve,
02:00so we're exploring sectors such as mining, railways and other industries,
02:05countries where we can operate both domestically and in countries other than the United States.
02:12Meanwhile, local unions and Brazil's federal government are working to soften the impact
02:16on manufacturers and help them find new markets in Canada, Asia and Africa.
02:20But building those business relationships takes time.
02:23The tariffs are also playing into Brazil's political debate.
02:26With negotiations stalled and a presidential transition potentially on the horizon,
02:30some business leaders hope that after the elections relations with Washington could improve again.
02:35I believe that once the election period is over, the rhetoric will change,
02:40the style of negotiation will change and the country may achieve some success
02:44or at least some improvement in the negotiations.
02:48Whether tariffs are lifted remains uncertain, but for companies like TechParts,
02:52better relations between Brasilia and Washington could mean the difference
02:55between further cuts and a return to growth.
03:00There are a lot of other countries that have been in the country.
03:00There are a lot of countries that have been in the country.
03:00There are a lot of countries that have been in the country.
