New US duty on Brazil exempts beef, coffee and aircraft

What happened

The Office of the US Trade Representative (USTR) imposed an additional 25% duty on goods of Brazil, subject to exemptions, from 12:01 a.m. Eastern time on 22 July 2026, according to a notice in the Federal Register on 20 July. The action followed a presidential memorandum of 15 July and a Section 301 investigation opened in July 2025, which covered digital trade and electronic payments, preferential tariffs, anti-corruption enforcement, intellectual property, ethanol market access and illegal deforestation.

The exemptions are broad. Beef stays exempt, as do civil aircraft and parts, articles for pharmaceutical use, semiconductor articles and goods already covered by Section 232 tariffs, according to the notice; unflavoured instant coffee was added to the list. USTR declined requests to remove beef, fresh oranges, iron ore pellets and most chemical wood pulp from the exempt list (it removed high-purity dissolving pulp), and declined to add agricultural machinery, apparel, electrical machinery, footwear, paper and steel. It received more than 360 written submissions and heard 77 witnesses over two days in July. Brazil is also in the flat 12.5% tier of the separate Section 301 forced-labour duties that took effect on 24 July, according to USTR's 28 July notice; the Associated Press reported that duties on some Brazilian products reach 37.5%.

The duty follows a broader measure that the courts struck down. In July 2025 the White House imposed an additional 40% tariff on most Brazilian goods under the International Emergency Economic Powers Act (IEEPA), effective 6 August 2025, GHY International reported. The Supreme Court ruled on 20 February 2026 that IEEPA does not authorise tariffs. A temporary 10% surcharge on most imports under Section 122 of the Trade Act then applied from 24 February to 24 July 2026, EY reported.

Why it matters

US imports from Brazil were $3.61 billion in August 2026, up from $3.06 billion in August 2025, the month the 40% tariff took effect (goods already in transit were exempt until 5 October 2025), according to the US Census Bureau. For January to August, imports were $24.1 billion, 17% below the same months of 2025. The US also sells more to Brazil than it buys: exports were $54.3 billion in 2025, against imports of $39.9 billion. One month of data under the new duty is not enough to judge its effect, and August includes goods shipped before it applied (inferred).

Each side rejects the other's case. US Trade Representative Jamieson Greer said Brazil's practices had kept US workers and producers out of the Brazilian market, Time reported on 16 July. Mr Lula's office said there was "no justification for unilateral measures against our country" and that Brazil would begin procedures under its Reciprocity Law and take the issue up again at the World Trade Organization. Mr Lula has called the US accusations politically motivated ahead of Brazil's October election, the AP reported. President Luiz Inácio Lula da Silva said in August that Brazil had triggered the reciprocity mechanism but did not want a fight with the US, the Associated Press reported. Brazil holds a presidential runoff between Mr Lula and Senator Flávio Bolsonaro on 25 October, NPR reported. Mr Bolsonaro led the first round with about 47% of the vote to Mr Lula's 45%.

Who it reaches

US importers of non-exempt Brazilian goods (sector). Requests to exempt footwear, apparel, agricultural machinery and paper were refused, so these goods carry the extra 25% unless they are covered by Section 232 tariffs. Confidence: reported. Source: USTR notice, 20 July 2026.

Meat processors and aircraft buyers (sector). Beef and civil aircraft are exempt, so their Brazilian supply costs are not affected by this duty. Confidence: reported. Source: USTR notice, 20 July 2026.

US exporters to Brazil (sector). Brazil has started proceedings under its Reciprocity Law, which allows countermeasures. No countermeasures had been announced in the sources reviewed. Confidence: reported for the proceedings, estimated for any retaliation. Source: AP via Fortune, 17 August 2026.

What would change this view

• September trade data. A second full month under the duty will show whether non-exempt imports fall.
• Brazil's runoff on 25 October. The result may change how Brazil approaches talks with the US.
• Section 307 changes. The notice says USTR may modify the action if the burden on US commerce rises or falls.

Sources

1. Notice of Action: Brazil's acts, policies and practices. USTR, Federal Register, 20 July 2026. link
2. Memorandum of July 15, 2026. Federal Register, 20 July 2026. link
3. Notice of actions in Section 301 investigations of various economies. USTR, Federal Register, 28 July 2026. link
4. US imposes additional 40% tariff on Brazilian imports. GHY International, 5 August 2025. link
5. Learning Resources, Inc. v. Trump. Supreme Court, 20 February 2026. link
6. Trade in goods with Brazil. US Census Bureau, data through August 2026. link
7. Brazil Condemns U.S. Decision to Impose 25% Tariffs, Vows to Retaliate. Time, 16 July 2026. link
8. Lula opens a U.S. tariff fight with big tech in the crosshairs. Associated Press via Fortune, 17 August 2026. link
9. Brazil's presidential race heads to Lula-Bolsonaro runoff. NPR via WUNC, 4 October 2026. link
10. US implements global 10 percent import tariff under Section 122 of the Trade Act of 1974. EY, 24 February 2026. link

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