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[BUSINESS] · United States, Brazil · 100 sources

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US 25% Tariff Proposal on Brazilian Exports Sparks Hearings and Negotiations

The United States, through the Office of the United States Trade Representative (USTR), is considering a 25% surcharge on roughly $14.9 billion of Brazilian imports, including wood, ethanol, iron and granite. The measure is being evaluated under Section 301 of the Trade Act, with a public comment deadline of 15 July 2026.

Brazil’s government has been lobbying to avoid the tariff, emphasizing that the proposed duties would hurt both economies. Minister of Development, Industry, Trade and Services Márcio Elias highlighted progress on trans‑national crime cooperation with the United States, yet reiterated that ethanol will remain excluded from the trade talks. Brazilian industry groups and U.S. firms, such as the American Chamber of Commerce in Brazil, have testified at USTR hearings, warning that the tariff would raise costs for U.S. manufacturers that rely on Brazilian inputs. One executive said, "A aplicação de novas tarifas seria prejudicial para ambas as economias."

Analysts note that the tariff threat has already reshaped trade patterns: Brazil’s surplus with the U.S. grew 40% in the first half of 2026, while exports have shifted toward China, India and the EU. Nonetheless, sectors like electric machinery, pulp, leather and minerals face significant challenges without clear alternatives.

The hearings, held in Washington, also examine alleged unfair practices such as Brazil’s digital payment system Pix and concerns over forced labor. The outcome will influence billions of dollars in bilateral trade and could set a precedent for future U.S. trade actions.

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