US to impose 25% tariff on a range of Brazilian goods

The United States will impose an additional 25% tariff on a broad range of Brazilian imports from 22 July, making Latin America’s largest economy the first major test of Washington’s rebuilt trade offensive after the Supreme Court curtailed President Donald Trump’s earlier tariff programme.

The action spares several of Brazil’s most important exports to the US, including coffee, beef, oranges and orange juice, some energy products and aerospace components. That reduces the risk of an immediate shock across food and energy markets. It still places pressure on sugar, ethanol and a range of industrial supply chains, while opening another confrontation between the Western Hemisphere’s two largest economies.

Brasília condemned the measure and said it would begin procedures under its Economic Reciprocity Law and return to the World Trade Organization. It has not yet published retaliatory rates or a list of American products, leaving a short window for further negotiations before the US duties start.

What Washington will tax

The 25% levy is an additional duty imposed under Section 301 of the Trade Act of 1974. The final exclusions protect goods that the United States does not produce in sufficient quantities, as well as products whose taxation could disrupt the wider US economy.

• Exemptions: coffee, beef, oranges and orange juice, some oil and gas products, aerospace parts and components, informational materials, donations and accompanied baggage.
• Separate treatment: articles already covered by national-security tariffs under Section 232 are excluded from the new Section 301 levy.
• Exposed sectors: products identified during the process include cane sugar, ethanol, pig iron, wood mouldings, tobacco, footwear and fish, subject to their precise customs classifications.

The implementation calendar creates an unusual two-day overlap. A temporary 10% worldwide surcharge imposed in February under Section 122 remains scheduled to run until 12:01 a.m. EDT on 24 July. Brazilian products covered by both measures will therefore face 35% in additional duties from 22 July until that surcharge expires, unless Congress extends it. The Brazil-specific 25% duty will then remain on top of ordinary customs rates.

The commercial relationship is substantial but does not fit a conventional deficit narrative. US Census figures show that the United States exported $54.3 billion of goods to Brazil in 2025 and imported $39.9 billion, producing a US goods surplus of about $14.4 billion. The Office of the US Trade Representative reports the same totals.

A more durable legal route

USTR opened its investigation on 15 July 2025. It examined six groups of Brazilian policies: digital trade and electronic payments, preferential tariffs, anti-corruption enforcement, intellectual-property protection, access for US ethanol and illegal deforestation. Washington argued that the practices were unreasonable or discriminatory and burdened US commerce. Brazil rejected those conclusions, including the allegation that Pix, the central bank’s instant-payment network, unfairly disadvantages American payment companies.

The process included more than 295 written comments, testimony from over 30 witnesses and public hearings on 6 and 7 July. That procedural record matters because Section 301 is narrower and more laborious than the emergency authority Trump previously used to impose sweeping tariffs, but it has a stronger history of surviving legal challenges.

Extensive negotiations with Brazil over the past year have not resolved these issues, but we remain open to continuing negotiations with Brazil.

The statement from US Trade Representative Jamieson Greer kept the door open to a settlement, although officials also warned that Brazilian retaliation could invite further American countermeasures.

The Brazil case is significant beyond the bilateral dispute. USTR has launched dozens of country and sector investigations as the administration moves away from a single global tariff structure. In a parallel process, it has proposed duties of 10% or 12.5% on 60 economies over what it describes as inadequate prohibitions on imports made with forced labour. Brazil is among the economies in that proceeding. Repeated country investigations could produce a fragmented system of overlapping tariffs, exemptions and deadlines even without a universal levy.

Retaliation without a product list

Brazil’s Economic Reciprocity Law, enacted in April 2025, allows the executive to suspend commercial and investment concessions and obligations involving intellectual-property rights in response to unilateral foreign measures that damage Brazilian competitiveness. The law calls for coordination with the private sector and proportionate action, meaning the government’s decision to invoke it begins a review rather than automatically imposing counter-tariffs.

Brazil also plans to return to WTO dispute settlement. It already requested consultations in August 2025 over the earlier US tariffs, formally opening dispute DS640. A renewed case would reinforce Brasília’s argument that trade grievances should be handled through multilateral rules rather than unilateral duties, although litigation would not remove the 22 July deadline.

For commodity markets, the exemptions are as important as the tariff itself. Protecting coffee, beef, orange juice and energy avoids concentrating a sudden US supply shock in products for which Brazil is a major exporter. The adjustment will instead fall more heavily on specialised markets and industrial inputs. Brazilian sugar, ethanol, pig iron and wood-product exporters may discount cargoes, redirect shipments or concede market share; US importers must absorb part of the duty, raise prices or find alternative suppliers.

Trade diversion will not be frictionless. Sugar is constrained by quota systems, ethanol specifications differ among markets, and industrial buyers qualify inputs for particular production lines. Brazil can deepen sales elsewhere, but logistics, standards and existing contracts limit how quickly another destination can replace the United States.

Retaliation presents a similar calculation. Because the United States runs a bilateral surplus, Brasília has a broad base of American exports it could target. Duties on machinery, chemicals or other production inputs, however, could also raise costs inside Brazil. The likely first phase is therefore pressure through legal procedures and negotiation. The larger risk is that the first Section 301 action in Washington’s new round becomes a template—and that measured retaliation gives way to a wider cycle of tariffs.