U.S. tariffs on Brazil test agricultural and industrial supply chains
A new U.S. additional tariff on selected Brazilian imports took effect July 22, creating a new test for agricultural and industrial supply chains while exempting products that officials said could be difficult to replace without wider disruption.
The Brazil-specific measure adds a 25% tariff under Section 301 of the Trade Act. A separate 12.5% Section 301 tariff connected to the U.S. government’s forced-labor investigation can apply to some of the same products, producing a combined additional surcharge of 37.5% when both measures cover the same good.
Brazil’s Ministry of Development, Industry, Foreign Trade and Services said July 24 that the two new Section 301 measures cover about 23.1% of Brazilian exports to the United States, using 2024 bilateral-trade data. The ministry estimated that 16.5% of exports could face both surcharges, 1.9% the Brazil-specific tariff alone and 4.7% the forced-labor tariff alone. It said 52.7% remained outside the new Section 301 and Section 232 surcharges, although ordinary U.S. duties and other measures may still apply.
What changed
The Office of the U.S. Trade Representative announced the final 25% Brazil-specific action on July 15 after a yearlong Section 301 investigation into what the U.S. government described as unreasonable or discriminatory Brazilian practices.
According to USTR, the investigation covered digital trade and electronic payments, preferential tariffs, anti-corruption enforcement, intellectual property protection, access for U.S. ethanol and illegal deforestation. USTR said the investigation involved more than 360 written comments and a July 6-7 public hearing at which 77 witnesses testified.
The final action took effect July 22. Brazil’s trade ministry said the measure did not apply to goods shipped and already in transit before that date if they entered the United States by July 29. Importers therefore had to track shipment status and entry timing, not simply the date a purchase order was placed.
Why some products were left out
The measure was not a universal tariff on Brazilian imports. The Federal Register notice describing USTR’s proposed action said the agency would consider whether products were necessary raw materials, available from alternative sources in sufficient quantities and at reasonable prices, or likely to cause serious supply dislocations or broader economic disruption. It also said USTR would consider whether tariffs would be practical or effective in changing the practices under investigation.
Associated Press reported that the final exclusions included examples such as coffee, beef, oranges and orange juice, some oil and gas products, and aerospace parts and components. Brazil’s trade ministry likewise listed coffee, meat, aircraft, orange juice and fruit among exports outside the new Section 301 surcharges.
Those exclusions limit the immediate risk of disrupting categories in which replacement supply may be constrained. They do not eliminate all commercial effects. Buyers and suppliers may still need to review contracts, inventories, customs classifications, exemption language and alternative sourcing plans. Ordinary duties or other trade measures can also remain applicable.
How the surcharges can stack
The separate 12.5% forced-labor action, published July 23, is distinct from the July 15 Brazil-specific tariff. Brazil’s assessment says both may apply to the same product. In that case, the additional Section 301 surcharges total 37.5%: 25% from the Brazil-specific action plus 12.5% from the forced-labor measure.
Brazil’s ministry estimated that 16.5% of 2024 Brazilian exports to the United States fell into that overlapping category. It cited examples including machinery and equipment, several types of wood, fats and oils, footwear, furniture and clothing. Another 1.9% was estimated to face only the Brazil-specific 25% surcharge, while 4.7% was estimated to face only the 12.5% forced-labor surcharge.
The 37.5% figure is not necessarily a product’s total landed duty. Importers must also account for the product’s normal tariff classification and any other applicable trade measures, fees or compliance requirements.
Who may feel the impact
U.S. importers, manufacturers, food businesses and retailers with Brazilian suppliers face a classification and compliance exercise. The immediate questions are whether a product is covered by one tariff, both tariffs or an exemption, and whether a shipment met the transition rules.
Brazilian exporters may face renegotiated prices, altered shipping schedules or pressure to identify other markets. The scale of the effect will vary by product because the final list left out goods for which replacement supply appeared limited or disruption risks were judged high. The tariff policy alone does not establish how much of any surcharge will be absorbed by exporters, passed through to buyers or reflected in retail prices.
What comes next
USTR said the action followed negotiations with Brazil and that Washington remained open to continuing talks. Brazil’s government has disputed the U.S. findings and defended its position in the Section 301 proceeding; those objections are the position of an interested party, not an independent adjudication of the dispute.
For now, businesses should rely on product-specific customs and USTR guidance rather than assuming that all Brazilian goods are treated alike. The policy’s practical reach will become clearer as importers file entries under the new rules and agencies issue further implementation guidance.
The central test is whether the targeted tariffs pressure Brazil while avoiding the supply shortages and price disruptions that the exemptions were designed to limit.
Key sources
- USTR final Section 301 action on Brazil
- Brazil trade ministry tariff-impact assessment
- Associated Press implementation report
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