On July 15, local time, the Office of the U.S. Trade Representative (USTR), under the direction of President Trump, announced that Trade Representative Greer is taking final action under Section 301 of the Trade Act of 1974 to impose 25 percent tariffs on certain goods from Brazil. The tariff measures are scheduled to take effect on July 22.

In a statement, the USTR said the action follows a year‑long investigation that concluded that Brazil’s policies and practices in digital trade and electronic payment services, unfair and preferential tariffs, anti‑corruption interference, intellectual property protection, ethanol market access, and illegal deforestation are unreasonable and burden or restrict U.S. farmers, workers, innovators, and exporters. The USTR held two hearings on the investigation, received more than 360 public comments, and conducted extensive negotiations with the Brazilian government.

Greer said the decision was necessary to address unfair trade practices and ensure that American workers and businesses can compete on a level playing field. While extensive negotiations over the past year failed to resolve the issues, the U.S. remains open to continuing talks with Brazil.

The U.S. tariffs cover thousands of Brazilian products, but exemptions are provided for oil and gas, beef, coffee, oranges and orange juice, aircraft parts, and other products that the U.S. does not produce or that could disrupt supply chains. According to Brazilian media reports, the U.S. ultimately exempted more than 2,000 products. Newly exempted items include pig iron, unsweetened instant coffee, organic honey, aluminum hydroxide, steel scrap, certain seafood, leather, certain wood products, pharmaceutical ingredients, as well as antiques, works of art, and second‑hand clothing. The USTR said these products are important industrial inputs for the U.S. and are either in short domestic supply or difficult to source from alternative countries.

However, not all exemption requests were granted. The U.S. denied applications for agricultural and industrial machinery, clothing, footwear, electrical equipment, garden tools, paper, organic sugar, and a range of manufactured goods.

U.S. Secretary of State Rubio said on social media platform X that the Brazilian government “has not engaged in good‑faith negotiations with the United States.” He accused Brazilian President Lula’s economic policies of “hurting both the U.S. and Brazilian people.”

In response, the Brazilian government issued a strong statement condemning the U.S. decision, calling it “unilateral, illegal, and arbitrary.” President Lula rejected the measures on the same day, saying the unilateral action was “unjustified” and that “Brazil does not recognize the legitimacy of an investigation not supported by multilateral trade rules.” Lula also denied the unfair trade allegations on social media, stressing that according to U.S. government statistics, the U.S. has accumulated a surplus of $424.5 billion in goods and services trade with Brazil over the past 15 years.

The National Confederation of Industry of Brazil said the additional 25 percent tariff exacerbates pressures that are already affecting Brazilian exports, creating greater uncertainty for businesses in both countries. The confederation’s president, Alban, noted that exports from 20 Brazilian states to the U.S. have already declined this year, and the new tariffs are certain to worsen the situation.

The tariff is the latest escalation in U.S. trade policy toward Brazil. In November 2025, the U.S. had lifted the 40 percent tariffs previously imposed on Brazilian beef, coffee, and other goods. Earlier this year, the U.S. Supreme Court ruled that President Trump’s broad tariffs under the International Emergency Economic Powers Act exceeded his authority. The Section 301 tariffs are seen as a new path to bypass the Supreme Court ruling.

Visiting Canadian Foreign Minister Anita Anand said in São Paulo on July 14 that Canada is determined to conclude a free‑trade agreement with the Southern Common Market (Mercosur) by the end of this year. The announcement comes amid persistent pressure from U.S. protectionist trade policies, highlighting Canada’s strategic move to diversify its trading partners.

Talks accelerating with clear target

Anand made the remarks at a joint press conference with Brazilian Foreign Minister Mauro Vieira. “We have a firm commitment to reaching an agreement with Mercosur, ideally by the end of the year,” Anand stated. She emphasised Canada’s intention to expand cooperation with partners beyond the United States in the coming decades.

Foreign Minister Vieira disclosed that the two sides have held six rounds of negotiations and made notable progress, though some details remain to be fine‑tuned. Earlier reports indicated that Ottawa is speeding up the negotiating process, aiming to finalise the deal this autumn, with signing possibly in September or October.

U.S. tariff pressure acts as catalyst

Negotiations for a Canada‑Mercosur FTA are not new; they stalled for years. In 2025, driven by the tariff offensive of the Trump administration, both sides returned to the table. U.S. protectionist policies are prompting countries to deepen cross‑border economic ties.

Mercosur comprises Argentina, Bolivia, Brazil, Paraguay, and Uruguay. In 2025, bilateral merchandise trade between Canada and Mercosur reached US$12.6 billion. Estimates suggest that the FTA could cover an economic bloc worth as much as US$4.5 trillion.

Domestic agricultural concerns remain

Despite progress, the deal faces headwinds in Canada. Anand acknowledged domestic worries about potential impacts on Canadian agriculture. Previously, Mercosur and the European Union reached an agreement in January after over 25 years of talks, but fierce opposition from European farmers severely delayed the process. The EU deal took effect provisionally in May but still requires final ratification. Analysts point out that Canadian agricultural stakeholders similarly fear being flooded by cheap imports from major farm producers like Brazil. (End)

Brasília, July 15 – July 15 marks the final deadline set by the Office of the U.S. Trade Representative (USTR) for deciding whether to impose an additional 25% tariff on certain Brazilian goods. As of the eve of the deadline, the Brazilian government had not received any clear signal from Washington. Analysts view the tariff threat as part of Washington’s strategy to “reshuffle” the Western Hemisphere, aiming to bring Brazil onto a new U.S. policy track for Latin America.

25% tariff threat looms

The tariff threat stems from a Section 301 investigation initiated by the USTR against Brazil. The U.S. claims that Brazil engages in “unfair trade practices” concerning the Pix electronic payment system, ethanol tariffs, and illegal deforestation. If imposed, the additional 25% duty would affect a substantial portion of Brazilian exports to the United States.

Negotiations at an impasse

Despite ongoing diplomatic engagement, Brazil and the U.S. have failed to break the deadlock. Obstacles include Brazil’s refusal to concede on the Pix system and Washington’s unwillingness to accept Brazil’s proposed reduction of ethanol tariffs. President Lula da Silva’s administration assessed that reaching a deal before the deadline was “almost impossible.”

On July 15, the Brazilian government issued a statement reiterating that “any imposition of additional tariffs is unfair and not a path to a bilateral agreement.”

Political motives overshadow economic considerations

Paulo Borba Casella, professor of international law at the University of São Paulo, told Agencia Brasil that the U.S. “makes no secret” of the political motivations behind the measure, making agreement even harder. He recalled that Trump once called Brazil an “unpleasant country” and described the tariff threat as a form of “interference in internal affairs.”

Alexandre Pires, professor of international relations at IBMEC‑SP, analysed that the Trump administration is “hardening” its stance against countries that do not align with Washington’s policies, and Brazil is a primary target. “The White House seeks to realign the Western Hemisphere with the United States and distance it from China’s economic and technological influence,” Pires noted, “and Brazil, over the past two decades, has strengthened its ties with China in the face of an increasingly closed traditional partner.”

Brazil prepares countermeasures

It is reported that the Brazilian government is already discussing response options should the tariffs be confirmed. Analysts warn that a 25% duty would severely hit Brazilian small‑ and medium‑sized exporters and could ripple through the stock market, exchange rate, and interest rates. (End)