Trump Imposes Tariffs on Brazilian Imports, Predicts Spread to Over 80 Countries

[Mexico City = Shim Young-jae, Correspondent] The Trump administration will impose an additional 25% tariff on imports from Brazil. This measure targets Brazil's digital trade, electronic payments, intellectual property rights, and market access policies. However, it notably excludes coffee, beef, and crude oil, which are of concern due to supply shortages and price shocks in the U.S.

The Office of the United States Trade Representative (USTR) announced on the 15th (local time) that it has finalized the additional 25% tariff on Brazilian imports. The tariffs will take effect at 12:01 AM (Eastern Time) on the 22nd. According to Yahoo Finance and Bloomberg, this measure could serve as the starting point for a new tariff regime targeting over 80 countries beyond Brazil.

25% Tariff After Year-Long Investigation... Targeting Pix

The U.S. has once again pulled out the tariff card against Brazil. This time, it is not just political pressure; it has undergone a formal investigation and public comment process under Section 301 of the Trade Act of 1974.

According to the USTR's final action document, the U.S. began an investigation on July 15, 2025, into Brazil's digital trade and electronic payment services, discriminatory tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation issues. The USTR determined on June 1, 2026, that some of Brazil's policies were unreasonable or discriminatory and restricted U.S. commerce. Subsequently, over 360 written comments were received, and two days of public hearings were held on the 6th and 7th, during which 77 testimonies were heard.

Based on the investigation results, the USTR decided to impose a 25% additional tariff on all Brazilian imports. President Donald Trump concluded that a 25% tariff would be more effective in prompting changes in Brazilian policies than negotiations for lower or zero tariffs. The USTR explained that negotiations with the Brazilian government had continued, but U.S. concerns had not been sufficiently addressed.

According to Bloomberg, a representative case raised by the U.S. is Brazil's central bank's real-time electronic payment service, Pix. The U.S. claims that the Brazilian government has implemented policies favorable to Pix, discriminating against U.S. payment providers. In contrast, Brazilian President Luiz Inácio Lula da Silva has regarded Pix as a symbol of Brazil's technological sovereignty and financial independence.

The U.S. also raised concerns that Brazil provided preferential treatment to products from Mexico and India and did not adequately enforce anti-corruption and intellectual property regulations.

Jamieson Greer, the U.S. Trade Representative, stated to Bloomberg, "We must respond to unfair trade practices to ensure that American workers and businesses can compete in a fair environment," adding, "Although the issues have not been resolved through negotiations over the past year, we will keep the door open for negotiations with Brazil."

Exclusions for Coffee, Beef, and Crude Oil... Minimizing Impact on U.S. Supply Chains

While the tariff targets are broad, the list of exceptions is extensive. According to Yahoo Finance, the exemption list is nearly 100 pages long and includes crude oil, natural gas, beef, coffee, and oranges.

According to the USTR's final document, the U.S. government excluded raw materials that could disrupt domestic supply, products that could cause economic turmoil, and items that are not sufficiently produced in the U.S. or are difficult to source from third countries. Products deemed unlikely to contribute significantly to changes in Brazilian policies were also included in the exemption list.

The USTR maintained most of the initially proposed exempt items while adding seafood, pharmaceutical raw materials, some timber, steel scrap, organic honey, pig iron, non-aromatic instant coffee, and used clothing. Aluminum hydroxide was also exempted. The opinion reflected that about 40% of U.S. demand relies on Brazilian imports, and these are irreplaceable raw materials needed for water purification, flame-retardant materials, and defense and industrial products.

Organic honey was considered due to the fact that U.S. production meets only 3% of annual demand, with up to 80% of U.S. imports coming from Brazil. The opinion accepted that over 95% of U.S. pig iron production is consumed in domestic integrated steel mills, leading foundries to rely on imports. China uses most of its domestic production internally, and supply from Russia and Ukraine is limited due to the war, making alternative sourcing difficult.

Non-aromatic instant coffee was also added to the exemption list. According to the USTR, Brazil is the world's largest coffee producer, and the non-aromatic instant coffee widely consumed in the U.S. is difficult to substitute with domestic production. Opinions reflected that third-country suppliers struggle to meet the quantities and technical standards required by U.S. manufacturers.

However, not all exemption requests were accepted. Agricultural machinery, clothing, electrical machinery, footwear, horticultural tools, mining equipment, paper, steel, and organic sugar were excluded from additional exemptions. The USTR determined that even if there is a domestic supply shortage, items can be sourced from third countries or that tariffs would not cause a shock significant enough to disrupt the economy as a whole.

According to Bloomberg, while coffee, beef, and some ethanol-related items are exempted, tariffs will still apply to ethanol itself. The U.S. ethanol industry argues that a 25% tariff is necessary to counter Brazil's ethanol tariffs against the U.S. Opponents warn that if combined with other tariffs, Brazilian ethanol could face tariffs as high as 37.5%.

Tariffs Impacting Brazilian Elections... Opportunity Rather Than Backlash for Lula

These tariffs are expected to affect not only trade issues but also Brazil's presidential election in October.

According to Bloomberg, President Lula has previously characterized U.S. tariff pressures as attacks on Brazilian sovereignty, which helped boost his approval ratings. This measure could also serve as an opportunity to strengthen his image as a leader standing up to the U.S.

Lula's main competitor is Senator Flávio Bolsonaro, the son of former President Jair Bolsonaro. Senator Flávio visited the U.S. earlier this month and claimed that the tariffs would actually help Lula's re-election. He stated in the USTR's submitted comments that "the proposed tariffs would reward the target rather than punish them."

However, the U.S. government did not accept his request. According to Bloomberg, Lula's camp plans to link the tariff increase to the Bolsonaro family, reinforcing the narrative of 'betraying national interests.' The campaign will also utilize the slogan 'TariFlávio,' combining Flávio's name with tariffs.

The Brazilian government has stated that it sees no legitimacy in the U.S.'s unilateral actions and is preparing to respond. President Lula criticized the tariffs as a "regrettable milestone," citing that the U.S. has a trade surplus with Brazil. He claimed that this measure is part of a political maneuver created with the active cooperation of the Bolsonaro family.

The Brazilian government has announced plans to diversify its trading partners and consider filing a complaint with the World Trade Organization (WTO) and retaliatory tariffs. However, both countries appear to want to avoid a full-blown trade war.

According to Bloomberg, Greer has recently met several times with Brazilian Trade Minister Márcio Elias to discuss solutions. The Lula government also intends to continue negotiations until the last moment. However, it has stated that it will not comply with politically or legally unacceptable demands, such as changes to the Pix system.

Both countries have significant interests at stake. According to Bloomberg, the U.S. is Brazil's second-largest trading partner. Brazil imported over $45 billion worth of U.S. products last year, an 11% increase from the previous year. In contrast, exports to the U.S. decreased by about 7%, with crude oil accounting for 12.5% of total exports.

Tariffs Spreading to Over 80 Countries... A New Global System in Motion

The Brazilian tariffs signal a larger restructuring of U.S. tariffs.

According to Yahoo Finance, the U.S. is also conducting a separate Section 301 investigation regarding forced labor. This investigation entered the public comment phase on the 2nd of last month. The report claims that dozens of countries have not sufficiently blocked goods produced by forced labor, restricting U.S. commerce.

Yahoo Finance reported that as a result of this investigation, a 10% tariff could be applied to 15 regions, including the European Union (EU) and Canada, and a 12.5% tariff could be applied to 45 countries, including China. The total number of affected countries could exceed 80. The EU has protested that the U.S. measures are unjustified.

The U.S. is also conducting a separate Section 301 investigation targeting structural overcapacity and Vietnam. There is a possibility that additional tariffs will be announced in the coming months.

According to Yahoo Finance, this Brazilian measure marks the implementation phase of a permanent tariff system that the Trump administration has been preparing since the U.S. Supreme Court invalidated the 2025 tariffs in February. The U.S. government refunded businesses large sums in tariffs after the ruling, with approximately $50 billion refunded just last month.

The Trump administration imposed a temporary 10% global tariff based on Section 122 of the Trade Act in February. However, that authority may expire during the summer. If country-specific tariffs utilizing Section 301 investigations follow Brazil, it could replace temporary tariffs with a more long-term and legally stable system.