US imposes new 25% tariffs on Brazil, expands exemptions list

The late-night announcement by US Trade Representative (USTR) Jamieson Greer made Brazil the first country targeted under Trump's new tariff strategy, which relies on Section 301 of the Trade Act of 1974, an unfair trade practices statute. Trump's previous global tariffs under an emergency law, including duties of up to 50% on Brazilian goods, were struck down by the US Supreme Court in February.

The new tariffs are scheduled to take effect on July 22, two days before Trump's temporary 10% global tariff is scheduled to expire. The final order maintained exemptions for Brazilian rare earths, beef, coffee, aircraft and other goods but expanded that list.

Tariffs from other Section 301 probes are expected to eventually ensnare major US trade partners including India, China, Japan, South Korea and the European Union as Trump seeks a trade reset after the US Supreme Court struck down a previous round of global levies.

Wednesday's announcement by the USTR office follows months of fruitless negotiations between US and Brazilian officials after the Trump administration proposed new tariffs in June, saying Brazil's practices were unfair on a range of issues from digital trade to illegal deforestation.

"Extensive negotiations with Brazil over the past year have not resolved these issues, but we remain open to continuing negotiations with Brazil to bring about long-needed changes to the problems identified in this investigation," Greer said in a statement.

Brazilian President Luiz Inacio Lula da Silva, who is expected to run for reelection in October, said the US decision lacks justification. Brazilian officials have long suggested, in private conversations, that the motives for the new tariffs were political,making negotiations fruitless.

Brazil would immediately begin proceedings to invoke instruments provided for under the "Reciprocity Law" and revisit the matter within the framework of the World Trade Organisation dispute settlement mechanism, he said in a statement.

The new levies are likely to alarm US trading partners around the world, including India, which has struggled to sign a trade deal with Washington at least partly because of the Section 301 investigations into lax enforcement of forced labor bans and excess industrial capacity.

"The Brazil case ... is a warning for India," said Ajay Srivastava, founder of the Global Trade Research Initiative think tank. "It shows that Washington can use trade action not only over tariffs and market access, but also against any policy it sees as unfair to US business."

'LULA HAS PUT HIS OWN EGO AHEAD OF MAKING A DEAL'

US Secretary of State Marco Rubio, who was accused by Lula of being anti-Latin America when the US tariffs were proposed in June, blamed the Brazilian president and said "Lula and his government have not negotiated with the US in good faith."

"For the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that," Rubio said in a strongly worded post on X.

Brazil's Foreign Affairs Minister Mauro Vieira called Rubio's remarks unacceptable and offensive to the Brazilian government and people, adding Lula had sought dialogue throughout the process.

"Rubio launched a rude and arrogant attack on the head of state of a friendly country," he said in a statement.

Vieira also reiterated Brazil's willingness to negotiate despite Washington's "political motivation."

The Brazil tariffs would be levied on thousands of imports, including sugar, agricultural machinery, apparel, electrical machinery, and paper.

USTR said that the new tariffs would not apply to products already subject to Trump's Section 232 tariffs on steel, aluminum, copper, autos and other goods.

After public comments and lobbying from some industries, USTR removed some products from proposed exemptions, but it kept in place major exemptions for beef, coffee, rare earths, energy products, aircraft, and aircraft parts and expanded this list with pig iron and steel scrap used by electric-arc furnace steelmakers, unflavored instant coffee and organic honey.

The American Chamber of Commerce for Brazil, a business group, reported the new tariff increased exemptions by 25%, covering some $11-billion in annual trade, $2-billion less than expected, though it places "Brazil among the countries facing the most restrictive conditions for access to the US market."

Around 18% of Brazil's exports to the US, or about $7-billion, will be affected by the new tariffs, said Brazil's Trade Minister Marcio Elias Rosa, adding the timber, machinery, furniture and footwear sectors are among the most affected.

Dan Anthony, executive director of a coalition of more than 1 200 US small businesses called We Pay The Tariffs, called the import taxes "a blunt tool with a weak connection between the practices at issue and the American companies that will bear the costs."

The investigation into Brazil, opened in July 2025, cited several alleged unfair practices, including illegal deforestation and Brazil's instant payment system, Pix, which the US government argues disadvantages credit card companies.

Brazil vehemently rejected all the allegations.

Brazil has also been included in a separate Section 301 investigation by the USTR, due to conclude on July 24, into connections to forced labor in the supply chains of dozens of countries.

The probe is expected to result in an additional 12.5% tariff, bringing the total burden for affected Brazilian products to 37.5%. Rosa said the government anticipates the new tariffs to be confirmed.