USTR proposes 25% Section 301 tariff on all Brazilian goods, with statutory deadline July 15 and public hearing July 6

Summary

The US Trade Representative on June 4 published a Federal Register notice proposing a 25% tariff on essentially all goods of Brazil under Section 301 of the Trade Act of 1974, following a formal determination that Brazil's acts, policies and practices related to digital trade, illegal deforestation, intellectual property enforcement, ethanol market access and anti-corruption enforcement are unreasonable and burden US commerce. The proposed tariff carves out articles already covered by Section 232 tariffs and more than 1,600 Harmonized Tariff Schedule subheadings, including a specific 430-item carve-out protecting Embraer-linked aircraft components. Written comments closed July 1; a public hearing runs July 6-7 at the US International Trade Commission in Washington. The statutory deadline for a final action determination is July 15. Brazilian President Luiz Inácio Lula da Silva called the action unjustified and politically motivated and threatened retaliation if tariffs take effect.

The split

The USTR determination frames the action under the same Trade Act of 1974 Section 301 authority used for China tariffs, presenting it as a rule-of-law trade enforcement measure. Brazilian authorities read it as selective pressure targeting a government with an independent foreign policy on Gaza, Ukraine and multilateral forums, and noted that USTR acted weeks after Brazil adopted digital payment rules the US financial sector opposed. US trade lawyers note the scope is unusual: Section 301 actions typically target specific sectors, not a blanket 25% on all goods from a major economy. Covington & Burling characterises it as creating "renewed bilateral tensions" at a moment when Brazil chairs the G20 preparatory track. The aircraft carve-out protecting 430 Embraer-linked HTS items signals that commercial lobbying shaped the tariff's contours.

By the numbers

• 25%, proposed tariff rate on all Brazilian goods not otherwise excluded
• 1,600+, Harmonized Tariff Schedule subheadings exempt from the tariff
• 430, aircraft-related carve-outs protecting Embraer and related US airline supply chains
• 6, issue areas cited: digital trade and electronic payments, unfair preferential tariffs, anti-corruption enforcement, IP protection, ethanol market access, illegal deforestation
• July 6-7, public hearing at the US International Trade Commission in Washington
• July 15, statutory deadline for USTR's final action determination under the Trade Act of 1974

Why it matters

Brazil is the United States' seventh-largest goods trading partner and the largest economy in Latin America, and Section 301 tariffs at 25% would substantially raise the cost of Brazilian exports across agriculture, aerospace, chemicals and manufactured goods. The aircraft carve-out protecting Embraer reflects the practical reality that US regional airlines depend on Embraer jets. For Brazil, the timing immediately before the G20 ministerial cycle signals US willingness to use trade tools against governments that diverge from Washington on geopolitical alignment, and sets a precedent that could be applied to other BRICS economies.

What to watch

• Whether USTR finalises the 25% tariff, a modified rate, or a negotiated suspension before the July 15 deadline
• Brazil's retaliation options: Lula's government has signalled it could target US agricultural exports or US digital platforms operating in Brazil
• Whether the July 6-7 hearing produces any Brazilian concessions on digital trade or ethanol access that could alter USTR's final action
• Implications for the G20 ministerial track, which Brazil chairs