US Imposes 25% Tariffs on Brazil
How a Struck-Down 50% Levy Was Rebuilt on New Legal Ground

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On July 22, 2026, the United States imposed an additional 25% tariff on imports from Brazil under Section 301 of the Trade Act. The measure covers furniture, ethanol, machinery, footwear, sugar and other goods — a basket amounting to roughly 20 to 30 percent of Brazil's exports to the US. At the same time, products with a heavy bearing on US prices and industry — beef, coffee, orange juice and aircraft parts among them — were placed on the exclusion list.

Why the 50% tariff disappeared

The saga of US tariffs on Brazil has taken several sharp turns over the past year. In 2025, the Trump administration invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs of up to 50% — a 40% surcharge on top of a 10% baseline — citing the trial of former president Bolsonaro and Brazil's digital policies. But on February 20, 2026, the US Supreme Court ruled the IEEPA-based tariffs unlawful, and they were terminated on February 24.

The new 25% levy fills that vacuum. The Office of the US Trade Representative (USTR) had been conducting a Section 301 investigation covering digital trade, intellectual property, ethanol market access, anti-corruption measures and illegal logging, and moved to retaliatory tariffs as its conclusion. With the emergency powers of IEEPA off the table, the administration switched to Section 301 — a slower route, but one on far firmer legal footing. That is the shape of this episode.

Why Mexico is shielded and Brazil takes the direct hit

Within Latin America, Mexico's position stands in stark contrast. Goods qualifying under the United States-Mexico-Canada Agreement (USMCA) continue to enjoy effectively zero tariffs. Yet USMCA itself is now inside a formal review process that began on July 1, 2026. The US declined to extend the pact as it stands, pushing it into the more precarious phase of annual reviews (see our earlier coverage of the USMCA review).

Brazil has no equivalent of USMCA to shelter under. What it does have in motion is the trade agreement between the European Union and Mercosur. Signed in January 2026, the interim trade agreement entered provisional application on May 1, and tariff reductions are already under way. Together with expanding soybean and iron ore exports to China, Brazil is working to dilute its dependence on the US market — but exports to the US still account for roughly a tenth of the total, and distribution networks in the American market cannot be replaced overnight.

A trade card in an election year

Brazil holds the first round of its presidential election on October 4, 2026, with a runoff on October 25, and President Lula has declared he will seek re-election. The tariff standoff with Washington is a double-edged issue: it can showcase a defense of national sovereignty, or invite blame for the economic damage.

The author's take

To my mind, the most important thing about this episode is not the 25% figure but the fact that, even after a Supreme Court ruling, the administration was able to rebuild the same policy on a different legal basis. When the IEEPA tariffs were struck down, some expected the trade pressure to end. In reality, it took about five months to switch to Section 301. The slower procedure narrowed the product list and added exclusions, but the architecture of pressure itself has been preserved.

Three indicators are worth watching: updates to USTR's exclusion list (additions and removals track the state of negotiations), whether Brazil escalates to the World Trade Organization (WTO) or retaliatory measures, and the interim report of the USMCA review. The lesson of this episode — that having a treaty umbrella makes all the difference — holds only as long as the umbrella itself stays up.

Glossary

Section 301 = the provision of the US Trade Act that allows investigations and sanctions against unfair trade practices. IEEPA (International Emergency Economic Powers Act) = a law granting the president emergency economic sanction powers; the Supreme Court rejected it as a basis for tariffs in February 2026. USMCA = the United States-Mexico-Canada Agreement, successor to NAFTA. Mercosur = the Southern Common Market of Brazil, Argentina and other South American countries.

The legal basis for the tariffs has changed; the objective — pressure — has not.

※ This article is the author’s commentary based on public information. Please confirm the latest figures, dates and procedures with governments and primary sources. Quotations are kept minimal and sources are cited.