Reshma Kapadia
The U.S. Trade Representative late Monday proposed 25% tariffs on Brazil, concluding a probe into the country's trade practices that started last year.
The new levies would be at half the level they were before the Supreme Court struck down global tariffs the Trump administration had issued under the International Emergency Economic Powers Act.
The move also could offer hints of what's ahead in coming weeks as investors await two other USTR probes under Section 301 of the Trade Act of 1974 against dozens of countries. The Trump administration is aiming to rebuild at least some of the tariffs that were struck down by the Court to replace the temporary 10% levies it imposed as a bridge -- which expire July 24.
The USTR highlighted Brazil's policies and practices related to digital trade and electronic payment services, preferential tariffs, anticorruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation, describing them as "unreasonable" or posing a burden or restricting U.S. commerce.
In a statement, Trade Chief Jamieson Greer said the U.S. has had "several constructive" meetings with Brazilian President Luiz Inácio Lula da Silva and his cabinet that have accelerated in recent weeks, but that substantial differences in resolving issues continue. The tariffs are set to go into effect July 15.
The probe into Brazil's trade practices was launched last year, with the U.S. hitting Brazil with a 50% tariff rate -- one of the highest against trading partners -- that included a penalty for Brazil prosecuting former President Jair Bolsonaro, an ally of President Donald Trump. Those tariffs excluded products that could cause "economy wide disruptions" if hit by levies. They also exempted goods that can't be made in size in the U.S., such as beef, pineapples, coffee, certain minerals, and aircraft parts.
Brazil pushed back. In a statement to Barron's, the Brazilian government said the investigation was "an attempt to interfere" in the country's internal affairs and that the action is not justified. Brazil noted that the U.S. has run a trade surplus, rather than a deficit, with the country for the last 15 years. Officials said talks with the U.S. are ongoing, and that Brazil doesn't expect tariffs to be imposed. They added that Brazil will "adopt any and every measure" of mitigating damage to Brazil's economy, jobs, and income.
The USTR also began a public hearing and comment period, set to end July 24 -- procedural efforts that could make it harder to challenge Monday's proposed tariffs in court, said Ryan Majerus, partner at King & Spalding and a former trade official.
"It reflects a desire to not do the sky-high tariffs in the period of the [International Emergency Economic Powers Act] tariffs but make them significant enough to have leverage against trading partners," Majerus said. "They are clearly sensitive to affordability issues and the notion they shouldn't tariff particular products."
Analysts are now focused on the two bigger USTR probes -- which are looking into excess capacity and forced labor in multiple countries -- and will likely be completed in coming weeks. Owen Tedford, an analyst at Beacon Policy Advisors, says the 30-day comment period in the Brazil probe and two weeks before implementation suggests the findings from the two probes could hit around June 10.
Those probes will help determine if the current 10% tariff on many countries will hold steady, increase slightly, or return to the levels determined before the Supreme Court's decision. If the Brazil situation offers a guideline, it looks like there could be a middle-road, with some goods excluded from the levies.
Write to Reshma Kapadia at reshma.kapadia@barrons.com
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June 02, 2026 14:33 ET (18:33 GMT)
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