Overview
- The U.S. Trade Representative has sent proposals to raise duties on a subset of Brazilian goods starting July 1, 2026, with additional levies that could reach 37.5% and a separate Section 301 recommendation for a 25% punitive tariff.
- The USTR report cites six categories of unfair practices as its legal basis: barriers to digital trade, asymmetries in electronic payments, distortions in preferential tariff programs, slow enforcement of intellectual property, ethanol-related disputes, and illegal deforestation.
- The tariff plan is selectively targeted to spare some strategic sectors such as aerospace, fossil fuels, certain minerals, coffee and beef, a design intended to limit inflationary effects and protect U.S. industry and voters.
- Brazil can respond under its 2025 Law of Economic Reciprocity, which lets Brasília suspend trade concessions, investment protections or IP obligations, and business groups are being urged to lead diplomatic engagement to try to head off measures.
- The move builds on long-running disputes over Brazil’s tariff structure — WTO data show a 30.8% non-agricultural tariff ceiling for 2024 while Brazilian studies point to a much lower effective tariff for U.S. goods — and the next steps are a White House decision by July 15 and likely legal and diplomatic fights thereafter.