Trump administration proposes 25% tariff on Brazilian imports

The Trump administration has proposed a 25% tariff on a wide range of Brazilian imports after concluding that several of Brazil’s trade practices unfairly restrict US commerce, according to the Office of the United States Trade Representative (USTR).

The proposed measure, announced Monday under Section 301 of the Trade Act of 1974, targets issues including digital trade, electronic payment services, intellectual property protection, ethanol market access and environmental practices linked to illegal deforestation.

US Trade Representative Jamieson Greer said an investigation launched last year found that Brazil maintained policies that were “unreasonable and burden or restrict US commerce,” paving the way for punitive trade action.

The proposed tariff would be subject to public consultation before a final decision. The USTR will accept comments through July 1 and hold a public hearing on July 6, with a July 15 deadline to take action.

Several major Brazilian exports would be exempt from the proposed tariff, including beef, coffee, rare earth minerals, crude oil, petroleum products, aircraft and aircraft parts, pharmaceutical compounds, fertilisers and certain metals and ores.

Speaking to CNBC, Greer described the proposal as “quite nuanced” because of the broad exemptions. He added that the USTR would soon release findings from other ongoing Section 301 investigations and said tariffs were necessary to address the United States’ large trade deficit.

The proposal would partially replace a 50% tariff imposed by President Donald Trump on many Brazilian goods last year. That measure included a 40% punitive surcharge linked to Brazil’s prosecution of former President Jair Bolsonaro. The US Supreme Court struck down those duties in February.

Greer said the United States and Brazil continued to have “substantial differences” despite recent discussions between officials from both countries.

Brazilian President Luiz Inacio Lula da Silva criticized the proposed tariff on Tuesday and accused U.S. Secretary of State Marco Rubio of being anti-Latin America. Lula said trade negotiators from both countries had met three times in recent weeks but had failed to reach an agreement.

He also noted that China had declared Brazil free of foot-and-mouth disease, a development expected to benefit Brazilian agricultural exports.

Two Brazilian officials familiar with the matter told Reuters that the U.S. findings overlooked arguments presented by Brasilia during negotiations and suggested the move was politically motivated rather than based solely on technical trade concerns.

Relations between Washington and Brasilia have cooled in recent months despite Lula’s visit to the White House last month.

Tensions increased after Rubio designated Brazil’s two largest criminal gangs as terrorist organisations, a move opposed by the Brazilian government. The designation could allow broader U.S. action against the groups and their networks.

Days before the announcement, Senator Flavio Bolsonaro, son of former President Jair Bolsonaro and a leading opposition figure, met senior U.S. officials in Washington and publicly supported the terrorist designation.

The proposed tariff would not apply to products already covered by separate national security tariffs under Section 232 of the Trade Expansion Act, including steel, aluminum, copper, motor vehicles and auto parts.

The Brazil investigation is one of several Section 301 inquiries currently being pursued by the Trump administration. Others focus on industrial overcapacity involving China and other trading partners, enforcement of forced-labor restrictions and intellectual property practices in Vietnam.