USTR Finalizes 25% Section 301 Tariffs on Imports from Brazil

On July 15, 2026, the Office of the United States Trade Representative (“USTR”) concluded its Section 301 investigation into Brazil’s unreasonable acts, policies, and practices by imposing a 25% tariff on most imports from Brazil, effective July 22, 2026. The action follows more than a year of investigation, multiple rounds of negotiations with Brazilian officials, a public comment period that generated over 360 written submissions, and a two-day public hearing held on July 6–7, 2026.

Background

USTR had initiated its Section 301 investigation by publishing a Federal Register notice (90 Fed. Reg. 34069) on July 18, 2025. The investigation targeted six categories of Brazil’s conduct: (1) digital trade and electronic payment services; (2) unfair, preferential tariffs; (3) anti-corruption enforcement; (4) intellectual property protection; (5) ethanol market access; and (6) illegal deforestation. On June 1, 2026, USTR determined that certain Brazilian acts, policies, and practices were actionable under Sections 301(b) and 304(a) of the Trade Act of 1974 and proposed the 25% tariff as the appropriate remedy (published at 91 Fed. Reg. 33854 on June 4, 2026).

Key Unfair Practices Identified

The notice and fact sheet identified six areas in which Brazil was found to maintain unreasonable acts, policies, or practices that burden or restrict U.S. commerce:

• Digital trade and electronic payment services: Court orders were cited as directing U.S. technology platforms (including X, Meta, and Google) to remove certain political content and suspend accounts, while limiting the platforms’ ability to disclose those orders. Enforcement measures for noncompliance (including fines and restrictions affecting assets and payment processing) were also cited, along with policies alleged to favor Brazil’s Pix system over U.S. electronic payment service providers.

• Unfair, preferential tariffs: Preferential tariff treatment reportedly provided to Mexico and India across a large number of tariff lines, at rates materially below Brazil’s MFN rates, was also cited as disadvantaging U.S. exports in the same sectors.

• Anti-corruption enforcement: USTR cited Brazil’s 2025 Transparency International CPI score (35/100) and asserted that recent actions move Brazil away from global anti-bribery and anti-corruption norms, disadvantaging U.S. companies that comply with those standards.

• Intellectual property protection:  Brazil’s long-running placement on the Watch List in USTR’s Special 301 Report (since 2007), reflected concerns about adequate and effective IP protection and market access for rights holders.

• Ethanol market access: USTR stated that Brazil discontinued what had been a more balanced tariff approach and failed to reciprocate favorable U.S. treatment, emphasizing a decline in U.S. ethanol exports to Brazil.

• Illegal deforestation: USTR concluded that, despite a legal framework addressing illegal deforestation, Brazil has not effectively enforced it and illegal deforestation continues, with downstream impacts on U.S. industry.

The 25% Tariff

Beginning July 22, 2026, most products of Brazil entered for consumption (or withdrawn from warehouse for consumption) will be subject to an additional 25% ad valorem duty under HTSUS 9903.05.01.

The fact sheet provided for a limited in transit exemption from the 25% tariff. Shipments are not subject to the additional duty if they are:

• Loaded onto a vessel and in transit before 12:01 a.m. ET on July 22, 2026, and
• Entered before 12:01 a.m. ET on July 29, 2026.

To note, this Section 301 duty applies in addition to other applicable duties and fees (including customs duties, antidumping and countervailing duties, if applicable). Additionally, products of Brazil admitted into a U.S. Free Trade Zone (FTZ) must be admitted in privileged foreign status as of the effective date, which means that duty rate will be locked in based on the status at admission.

Exemptions (Goods Not Subject to the 25% Tariff)

The final notice includes several carveouts. Key exemption categories include:

• Items already subject to Section 232 tariffs (to avoid double tariffs), including covered articles/parts involving aluminum, steel, copper, certain vehicles, and semiconductors.
• Civil aircraft, including aircraft, engines, and related parts/components.
• Pharmaceutical applications, including certain pharmaceuticals and inputs identified through the comment process.
• Certain supply-constrained or difficult-to-replace goods, including aluminum hydroxide, organic honey, pig iron, and unflavored instant coffee, as well as select categories such as certain hides/leather, seafood, wood products, iron and steel scrap, ash containing precious metals, antiques/collectibles/art, and used clothing.
• Standard exclusions include informational materials, humanitarian donations, and accompanied baggage. Additionally, Chapter 98 entries, where entry is properly claimed under an applicable provision of Chapter 98 of the Harmonized Tariff Schedule of the United States, pursuant to applicable U.S. Customs and Border Protection (CBP) regulations are also excluded from the scope of the tariffs.

Some proposed exemptions were narrowed in the final action, including removal of high-purity dissolving pulp from the exemption list and limiting certain chemical-product exemptions to pharmaceutical uses only.

What’s next

With the July 22, 2026, effective date approaching, companies importing from Brazil should promptly confirm whether their products are impacted or qualify for an exemption, assess any in-transit shipments against the July 29 entry deadline, and evaluate potential duty exposure (including where AD/CVD may also apply). USTR has also indicated that it will continue monitoring the issues identified in the investigation and may revise the measures if circumstances change, so companies should watch for further developments.

The Husch Blackwell International Trade and Supply Chain team continues to monitor developments related to the Section 301 action involving Brazil and will provide updates as they become available. If you have questions about coverage, exemptions, or supply chain impacts, please contact your Husch Blackwell attorney.