US Tariff of 37.5% Hits 4,000 Brazilian Products

Which Brazilian products are hit hardest?

Of the 4,060 Brazilian products now subject to the new US surcharge, 3,985 were already paying a 25% additional tariff. They will now face a combined rate of 37.5%. This group accounts for 80.7% of the affected exports — roughly US$ 10.8 billion in trade. The remaining 75 products, worth US$ 1.6 billion, will pay only the new 12.5% rate, as they were not covered by the previous levy.

How much of Brazil's exports to the US are now taxed?

According to the CNI, the new measures cover US$ 12.4 billion in Brazilian exports, equal to 29.4% of all sales to the United States. When combined with previously existing tariffs, 48.7% of all Brazilian exports destined for the US will now face some form of additional US tariff. The new charges took effect on Friday, July 25.

Why did the US impose this tariff?

Washington acted under Section 301 of the US Trade Act, following an investigation into whether Brazil and roughly 60 other trading partners have adequate mechanisms to prevent imports made with forced labor. The US concluded that Brazil's measures were insufficient. The Brazilian government and the CNI strongly contest this finding, arguing that Brazil has one of the most modern legal frameworks in the world for preventing, combating, and eradicating forced labor throughout supply chains, with internationally recognized enforcement and worker-protection mechanisms.

What is Brazil doing about it?

CNI president Ricardo Alban called for intensified negotiations between the Brazilian and US governments. "It is essential that dialogue between Brazil and the United States be maintained and deepened. At the same time, we need to act quickly to mitigate the impact on affected companies," he said. The CNI is already in talks with the federal government and the most affected sectors to build short-term relief measures.