* This article was written in collaboration with Lucas Spadano of Brazilian law firm Madrona Advogados.
Over the past few weeks, Brazil has faced increased trade scrutiny, and President Trump has specifically targeted the largest Latin American country for additional tariffs at a level higher than almost any other country. The tariff actions will greatly impact U.S. imports of Brazilian products, including coffee, and companies doing business with Brazil. In response, Brazil has enacted new rules that establish the legal framework for potential trade retaliation. Below, we provide an overview of U.S. tariff actions against Brazil and Brazilian perspectives on these issues.
Tariff Letter and Initial Threats
On July 9, 2025, President Trump sent a "tariff letter" to Brazil dictating a 50% tariff rate on Brazilian imports. The letter, as posted on Truth Social, provides:
- Reasons for the high tariffs, which include the trial of former Brazilian president Jair Bolsonaro and alleged attacks on free elections and free speech (more specifically, Brazilian Supreme Court rulings against American social media platforms).
- Unfavorable descriptions of the trade relationship between the two countries as unfair, not reciprocal, and disadvantaging the United States through Brazil's tariffs and non-tariff trade barriers and policies.
- Should Brazil retaliate with tariffs, the U.S. tariff rate will increase by the retaliation amount. (This language is standard within the tariff letters sent to other countries.)
- The United States Trade Representative (USTR) will initiate a Section 301 investigation into Brazil, explicitly naming alleged attacks on digital trade.
Section 301 Investigation
Following President Trump's tariff letter, on July 15, 2025, the USTR initiated a Section 301 investigation. The investigation focuses on Brazil's policies, practices, and acts in the following areas:
- Electronic payment services and digital trade, including court cases unfavorable to social media companies, restrictions on personal data transfer, and practices towards electronic payment services.
- Preferential tariffs: The USTR alleges unfair tariff practices and specifically references Brazil's treatment of Mexico and India versus its treatment of the United States.
- Anti-corruption enforcement, including allegations of weakened anti-corruption enforcement by Brazil.
- Intellectual property protection: The notice of investigation specifically references ineffective enforcement measures against counterfeit goods, modified gaming consoles, and illicit streaming devices, as well as complaints about the length of time taken to grant patent applications.
- Ethanol market access: The USTR alleges unfair tariff rates in comparison to the U.S.'s treatment of Brazilian imports.
- Illegal deforestation: The notice of investigation alleges that Brazil's lack of effective enforcement of environmental laws and regulations has allowed unfair exports of goods benefiting from illegal deforestation.
The USTR received public comments until August 18, 2025, and will hold a public hearing on September 3, 2025.
Executive Order and 40% Tariff
On July 30, President Trump issued an executive order (EO), "Addressing Threats to the United States by the Government of Brazil" (the "Brazil EO"), in which he declared a national emergency to combat "recent policies, practices, and actions of the Government of Brazil" that "threaten the national security, foreign policy, and economy of the United States." President Trump declared the national emergency under the International Emergency Economic Powers Act (IEEPA), which is the same statute under which the Trump administration has instituted specific tariffs against China, Mexico, and Canada, and "reciprocal tariffs" of varying levels against all other countries.
The Brazil EO reiterates certain claims from the July 9 tariff letter as a basis for the national emergency, including the treatment of President Bolsonaro and Brazilian Supreme Court rulings related to U.S. social media platforms. Additionally, the Brazil EO specifically mentions Brazilian Supreme Court Justice Alexandre de Moraes and alleges he "has abused his judicial authority to target political opponents, shield corrupt allies, and suppress dissent."
Pursuant to the national emergency, President Trump imposed a 40% tariff against most Brazilian-origin goods, effective August 6, 2025. Annex I to the Brazil EO lists multiple exclusions from the 40% tariff, including silicon metal, pig iron, civil aircraft and parts and components thereof, metallurgical grade alumina, tin ore, wood pulp, precious metals, energy and energy products, and fertilizers. The 40% tariff is in addition to the 10% reciprocal tariff levied against Brazilian products announced on July 31.
Brazilian Retaliation and Perspectives
The Brazilian government recently enacted Law No. 15,122/2025, known as the Economic Reciprocity Law. The law establishes criteria for suspending trade concessions, investments, and intellectual property obligations in response to unilateral measures adopted by a country or economic bloc that adversely affect Brazil's international competitiveness.
Under the Economic Reciprocity Law, the Executive Branch may adopt targeted and proportional countermeasures, such as suspending trade concessions, restricting imports, halting investments, or limiting the protection of intellectual property rights, in response to unfair external actions. The adoption of such measures is subject to public consultation. In urgent cases, however, the law allows for the immediate application of provisional countermeasures, which may remain in effect until the procedures required for the adoption of definitive measures are completed.
On July 15, 2025, the government issued Decree No. 12,551/2025, which provides detailed rules for the implementation of the Economic Reciprocity Law and establishes the institutional framework for its operation. To date, no countermeasures have yet been adopted.
Conclusion
The United States' escalating tariff actions and Brazil's possible responses are undoubtedly straining the trade and diplomatic relationship between the two most populous countries in the Western Hemisphere. Nonetheless, this remains a dynamic period for trade, and negotiations and de-escalation are possible, though not guaranteed. If you have questions about U.S. or Brazilian tariffs, or the relationship between the two countries, including cross-border business, please contact the attorneys at Torres Trade Law or Madrona Advogados.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
