New 25% Tariff on Brazilian Products in the US Takes Effect

The United States has implemented a new 25% tariff on Brazilian products. The restrictions will apply to agricultural machinery, wood products, ethanol, textiles, and other goods. Under the new tariff, Brazilian exports valued at $7 to $11 billion will be affected, representing approximately 18-26% of the country's total exports to the US.

This is the first instance in which the Trump administration has imposed tariffs following an investigation conducted under the 1974 Trade Act. Washington has accused Brazil of unfair trade practices, including issues in electronic payments, ethanol market access, and illegal deforestation.

Nevertheless, the US has maintained a positive trade balance with Brazil over the years. To mitigate the impact of the new tariff, the US has included several important products on an exemptions list, including beef, coffee, aircraft, and aircraft parts. However, this heavily impacts sectors that are significantly dependent on the American market.

One such sector is footwear manufacturing. The US is Brazil's largest foreign market for footwear, and one out of every five pairs of shoes exported from the country is sold in America. According to manufacturers, selling products in America under tariff conditions could become unprofitable, which also poses a threat to job reductions.

The impact of the tariffs on bilateral trade is already being observed. In the first half of 2026, Brazil's exports to the US decreased by $2.6 billion, or 13%, compared to the same period in the previous year. The decline particularly affected iron and steel products, petroleum products, and wood pulp.

In parallel, another investigation is underway against Brazil related to allegations of forced labor. Following the completion of this investigation, an additional 12.5% tariff may be imposed. In such a case, the total tariff on some Brazilian products could increase to 37.5%. At this stage, the Brazilian government does not yet have clarified information on whether the new tariff will be added to the already existing 25% tariff.

Source: Investing.com