On July 15 and 16, the Office of the US Trade Representative issued the final Section 301 action against Brazil, imposing a 25% tariff on substantially all Brazilian goods entering the United States starting July 22, 2026. This is the first major action under the Trump administration’s second term tariff strategy and the most consequential US-Brazil trade measure in decades.
The action follows USTR’s June 1, 2026 determination that certain Brazilian acts, policies and practices are unreasonable and burden or restrict US commerce under Section 301(b) of the Trade Act of 1974. The determination targets a broad set of Brazilian practices, including digital trade rules, electronic payment services regulation, preferential tariff arrangements with third countries, anti corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation. USTR received more than 360 written comments and heard from 77 witnesses across two days of public hearings on July 6 and 7, 2026 before issuing the final action.
Product coverage and exclusions. The 25% tariff applies to thousands of Brazilian product lines, but USTR carved out significant exclusions for goods that are strategically important to US industry or difficult to substitute: petroleum and petroleum products, coffee, spices, beef, orange juice, nuts, aircraft and aircraft parts, and products already subject to Section 232 duties (steel, aluminum, copper, autos). Notably, Brazilian ethanol is not exempt and will bear the full 25% duty. This is a politically charged outcome given US refiners’ long dependence on Brazilian sugarcane ethanol for RFS compliance.
Second wave possible. A parallel USTR Section 301 investigation is expected to conclude in the following week and could add another 12.5% tranche, bringing the effective tariff burden on Brazilian goods to 37.5%. That would put Brazil at or above the tariff level applied to China and would make Brazil the second highest tariffed US trading partner, despite the US historically running a trade surplus with Brazil, a point Brazilian officials have emphasized in condemning the action.
Brazil’s response. The Brazilian government has publicly condemned the measure and pledged to respond. Retaliatory action is expected via WTO dispute settlement and, potentially, targeted Brazilian tariffs on US exports. The action arrives at a delicate political moment domestically in Brazil and will materially affect exporters in industrial machinery, chemicals, footwear, textiles, processed foods, wood products and specialty agriculture, sectors that fall outside the exclusion list.
Immediate action items for exposed companies. With the July 22 effective date only days away, importers of Brazilian goods should:
- Accelerate entries currently in transit where feasible to lock in pre tariff duty treatment;
- Map product HTS codes against the exclusion list carefully, since the boundary between excluded and covered categories will drive substantial cost differences;
- Evaluate first sale valuation, tariff engineering and country of origin substitution options;
- Reassess supply agreements, most of which incorporate no automatic price adjustment mechanism for new Section 301 duties;
- Monitor USTR for a product exclusion request process, which historically follows Section 301 actions and can offer meaningful relief for specific inputs.
For clients with cross border operations between Brazil, the US, and third jurisdictions (including Portugal and other EU points), rerouting analyses should be run cautiously. USTR has signaled it will treat transshipment aggressively under the President’s June 3 executive order on customs enforcement.
Finally, the July 24 expiration of the temporary Section 122 10% baseline tariff is now converging with this Section 301 action to reshape the entire US tariff architecture. Brazil is the first country to see a durable, country specific replacement tariff, and, per USTR and the administration, dozens of additional Section 301 actions are queued behind it.