US imposes 25% tariff on imports from Brazil

The United States will impose a 25% tariff on most imports from Brazil starting July 22, according to a notice filed with the Federal Register on Wednesday. The notice, issued by the Office of the United States Trade Representative, details the scope of the tariffs and exemption conditions.

Although the 25% tariff will affect most Brazilian exports, the notice lists exempted products, including various fruits and vegetables (such as pineapples, bananas, and avocados), as well as beef and certain seafood. Additionally, the tariff will not be stacked on top of existing Section 232 tariffs, nor will it apply to goods already in transit before July 22 and withdrawn from warehouse for consumption before July 29.

The United States expanded the exemption list beyond its initial proposal in June, based on public comments and hearings held last week. Newly exempted items include aluminum hydroxide, certain pharmaceuticals and drug ingredients, unflavored instant coffee, and organic honey. The notice states that these exemptions were granted because the tariffs could lead to domestic supply shortages and cause economic disruption.

Despite adding more exemptions, the United States also removed high-purity dissolving pulp and certain non-pharmaceutical uses of certain chemicals and chemical products from the exemption list.

This announcement formalizes the tariffs proposed last month by U.S. Trade Representative Jamieson Greer, following a year-long Section 301 investigation into Brazil's trade practices. The USTR stated that the tariffs aim to address practices that harm U.S. commercial interests, including preferential tariffs imposed by Brazil, deforestation, and digital trade restrictions.

"Today's action is necessary to address these unfair trade practices and ensure that American workers and businesses can compete on a level playing field," Greer said in a statement on Wednesday. He noted that since the Section 301 investigation was launched last July, the United States has engaged in "extensive negotiations" with Brazil but failed to resolve U.S. concerns.

The Trump administration continues to use trade investigations to impose tariffs on various industries and countries. A previous Section 301 investigation into Nicaragua's trade practices led to a 15% tariff on its imports, while multiple Section 232 investigations have resulted in tariffs on steel, aluminum, copper, automobiles and parts, patented pharmaceuticals, and certain semiconductors.

Meanwhile, other investigations remain ongoing, including two Section 301 investigations examining enforcement of forced labor bans and global manufacturing capacity. Based on the forced labor investigation, the USTR has proposed tariffs of up to 12.5% on 60 trading partners and held public hearings last week, roughly concurrent with the hearings for the Brazil investigation.

"This Section 301 investigation was originally filed last year, but the case could provide important clues for other newer Section 301 cases, such as those against 60 countries for failing to properly enforce import bans that may involve forced labor," said Deborah Elms, head of trade policy at the Hinrich Foundation, in a LinkedIn post, commenting on the Brazil investigation.