On June 1, 2026, the Office of the United States Trade Representative (USTR) concluded an investigation into a variety of Brazilian trade practices under Section 301 of the Trade Act of 1974. The USTR proposed a 25% punitive tariff on Brazilian goods in response to Brazil’s practices related to digital trade and electronic payment services, unfair preferential tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation.
Section 301 creates the authority to investigate and impose trade sanctions against foreign countries that engage in unfair and discriminatory trade. Its goal is to secure the removal of foreign barriers and trade abuse.
Unlike traditional World Trade Organization dispute settlement procedures, Section 301 allows the U.S. to pursue unilateral trade remedies, and was utilized to justify the trade war with China in 2018. Proponents of the tariffs believed that, if successful, the tariff threat should persuade Brazil to drop the harmful practices. However, as others pointed out, the tariffs will increase the cost of commerce and risk the possibility that Brazil might seek new trade partners, permanently redirecting trade away from the United States. This is especially relevant as negotiations advance on the Mercosur-EU free trade agreement, which is set to remove tariffs on 91% of goods exported from the European Union to Brazil. This culmination of increased tariffs along with new trade partners risks the possibility that Brazil will not act on the named practices, but rather shift permanent trade to foreign markets.
Trump’s history of tariffs on Brazil has been tumultuous. Trump’s “Liberation Day” tariffs, announced on April 2, 2025, sought to revitalize American industrialization and reduce trade deficits.
Tariffs were imposed despite the fact that the United States had a $5.48 billion goods surplus with Brazil in 2024. The Liberation Day tariffs imposed an initial 10% flat tariff against Brazil under the authority of the International Emergency Economic Powers Act (IEEPA). Trump increased the total tariff rate to 50% after imposing a 40% additional tariff on Brazil, citing the trial of Jair Bolsonaro, Brazil’s previous president, as the reason for the expanded tariffs.
On February 20, 2026, the Supreme Court ruled that IEEPA did not authorize the president to impose these tariffs. Following the ruling, the Trump Administration turned to different means to impose tariffs, including Section 301.
On July 15, 2025, prior to IEEPA’s repeal, USTR started an investigation under Section 301 into Brazil for unfair trading practices, which concluded on June 1. The investigation cited six factors supporting the tariffs: restrictions affecting U.S. digital platforms and payment services, preferential tariff treatment for certain trading partners, inadequate anti-corruption enforcement, inadequate intellectual property protection, illegal deforestation, and tariffs on U.S. ethanol exports.
In addition, on March 12, 2026, USTR started an investigation into 60 countries, including Brazil, for failures to take action on forced labor, which concluded on June 2.
Respectively, the Brazil-specific investigation proposes levying a 25% tariff on Brazil, and the second investigation proposes levying a separate 12.5% tariff. However, the actions include some exceptions in recognition of the benefits imports from Brazil provide to the United States. For example, the Brazil-specific Section 301 tariff excludes beef, coffee, metals, energy products, aircraft parts, and certain agricultural goods.
The top five U.S. imports from Brazil are energy products (primarily oil), iron and steel, machinery, coffee, and aircraft parts. Despite U.S. imports from Brazil falling $2.587 billion between 2024 and 2025, Brazil closed 2025 with record global exports, approximately $11.6 billion more to the world than in 2024 as trade diversified and expanded.
When the U.S. started levying tariffs, many nations sought to implement reciprocal tariffs or decrease imports from the U.S. This led to a decrease in overall demand on U.S. goods, and thus decreased U.S. exports. After the United State’s trade war with China, China shifted soybean imports toward Brazil at the expense of U.S. farmers. China made up 37% of Brazil’s trade between August and December, the period the U.S. tariffs on Brazil were fully implemented. As a result of this trade policy, China is likely to maintain Brazil as a primary trade partner even if trade tensions with the United States ease.
USTR will hold a hearing on the proposed tariffs on July 6, as it continues to negotiate with Brazil in advance of the July 15 deadline to take action.
Current law allows tariffs to be imposed without congressional approval. Legislation requiring congressional approval is the best means to provide oversight before tariffs can take effect. A host of legislation addressing this concern has been proposed. New legislation which increases congressional oversight over tariffs imposed by the executive branch remains a simple yet significant means of protecting American taxpayers and keeping prices low.
The Section 301 investigation into Brazil’s practices should be pragmatic and comply with U.S. law. USTR ought to utilize Section 301 to reduce unfair trade barriers, not to impose new, ongoing U.S. tariffs to disrupt trade with Brazil at the cost of American taxpayers.