The Trump administration has proposed a 25% tariff on a broad range of Brazilian imports after the Office of the United States Trade Representative (USTR) concluded that several of Brazil’s trade and regulatory practices unfairly burden or restrict U.S. commerce, escalating trade tensions with Latin America’s largest economy.
The proposal is significant because Brazil is the largest economy in Latin America and the United States is its second-largest export market after China. The move also comes as the Trump administration expands the use of trade investigations and tariffs to address what it views as unfair foreign trade practices, making Brazil the latest target of a broader U.S. trade-enforcement strategy.
The proposed measures stem from a Section 301 investigation launched by the USTR earlier this year under the Trade Act of 1974, a U.S. law that authorizes trade action against foreign policies deemed discriminatory or harmful to American commerce. In findings released last week, the USTR said Brazil’s policies on digital trade, electronic payment services, intellectual property protection, ethanol market access and environmental enforcement were “unreasonable” and burdened U.S. businesses.
The tariffs are not yet final. The USTR has opened a public consultation period through July 1 and scheduled a public hearing for July 6. Following the hearing, the agency will review submissions before determining whether to implement the proposed duties and on what timeline. Key Brazilian exports, including coffee, beef, rare earths, aircraft parts, pharmaceuticals and crude oil, would be exempt.
What the Tariffs Aim to Achieve
The proposed tariffs are intended to pressure Brazil into changing policies that Washington argues restrict market access for American companies. According to the USTR investigation, concerns include barriers affecting digital services, payment systems, intellectual property protections and agricultural trade.
The action follows the same Section 301 mechanism used during previous U.S. trade disputes, including actions against China. Section 301 allows the U.S. government to impose tariffs or other restrictions after determining that foreign government practices unfairly affect American trade or investment interests.
The exemptions suggest the administration sought to limit the impact on products considered important to U.S. supply chains. According to the USTR’s proposed tariff list, goods including coffee, beef, aircraft parts, oil, fertilizers and certain critical minerals were excluded from the additional duties.
Impact on Brazil’s Economy
The United States is Brazil’s second-largest export market after China. According to Brazil’s Ministry of Development, Industry, Trade and Services, exports to the U.S. totaled about $40 billion in 2025, accounting for roughly 12% of Brazil’s total exports.
Economists and trade analysts say not exempt sectors could face reduced competitiveness if higher tariffs raise prices for U.S. buyers. According to Brazilian trade data, manufactured goods account for a substantial share of exports to the United States, making industrial exporters more exposed than commodity sectors covered by exemptions.
However, the immediate economic impact may be moderated by the broad list of exclusions. Major Brazilian export sectors, including coffee, beef, crude oil, aircraft-related products and certain strategic minerals, remain outside the proposed tariff regime, limiting the potential impact on Brazil’s largest export earners.
Brazil’s government criticized the proposal and said it would evaluate all available responses. Officials from President Luiz Inácio Lula da Silva’s administration have argued that Brazilian trade policies comply with international obligations and warned against measures that could disrupt bilateral trade relations.
Broader Trade and Political Implications
The proposal adds to a growing number of U.S. trade investigations. The USTR currently has ongoing Section 301 reviews and trade-related investigations involving industrial overcapacity, intellectual property and supply-chain practices across multiple countries, reflecting a broader shift toward more aggressive trade enforcement.
For Brazil, the dispute adds uncertainty at a time when global trade flows are already being affected by geopolitical tensions and slower growth in major economies. For U.S. businesses, the consultation process will determine whether the proposed tariffs strike a balance between addressing trade concerns and avoiding disruption to supply chains.
The next key milestones will be the close of the public consultation period on July 1 and the USTR hearing on July 6, after which the agency will decide whether to proceed with the tariffs, modify the proposal or pursue further negotiations with Brazil.
