US announces new 25% tariffs on Brazil for ‘unfair’ trade practices

Key Points:

• The United States will impose a 25% tariff on certain Brazilian imports starting July 22, following a yearlong investigation that found Brazil engaged in unfair trade practices affecting digital trade, ethanol market access, and deforestation issues.
• The tariffs exclude major Brazilian exports like coffee, beef, avocados, Brazil nuts, petroleum oils, and aircraft parts, and the US Trade Representative indicated openness to continued negotiations with Brazil.
• Brazilian President Luiz Inácio Lula da Silva condemned the tariffs as illegal and arbitrary, announcing plans for countermeasures under Brazil’s Reciprocity Law and seeking resolution through the World Trade Organization.
• This action is part of a broader US strategy under Section 301 of the Trade Act of 1974, with Brazil potentially facing an additional 12.5% tariff related to forced labor allegations, which would raise the total tariff burden to 37.5%.
• The tariffs mark a continuation of US trade measures following a Supreme Court ruling that limited presidential authority on import taxes, prompting the administration to pursue alternative tariff strategies and investigations.