Few countries have been on the receiving end of as many separate U.S. tariff actions in such a short window as Brazil. Since February 2025, Washington has announced, escalated, partially reversed, and re-threatened tariffs on Brazilian goods at least half a dozen times — culminating, in June 2026, in a proposal for a fresh 25% levy under a Section 301 investigation. For Brazilian exporters, the lesson of the past sixteen months has not been to wait for stability. It has been to diversify.

A whiplash timeline

The sequence reads like a stress test of bilateral trade relations. In February 2025, Washington imposed a 25% tariff on Brazilian steel and iron under Section 232, citing domestic industry protection. In April, a 10% "reciprocal" tariff followed under the administration's broader Liberation Day program. By May, the steel tariff had doubled to 50%. In July, President Trump sent a letter to President Lula threatening a 50% blanket tariff on all Brazilian products — invoking both trade grievances and the ongoing domestic prosecution of former president Jair Bolsonaro. That threat became real on July 30, when the administration declared a "national emergency" over Brazil's policies and imposed a 40% tariff on top of the existing 10%, bringing the cumulative rate to 50% for non-exempt goods effective August 6.

The story did not end there. In November 2025, after negotiations, Washington carved out 238 tariff lines — mostly agricultural products — from the 40% tariff. Coffee, tropical fruits, cocoa, bananas, oranges and beef were added to the exemption list days later. Then, in February 2026, the U.S. Supreme Court ruled in a separate case that Trump's use of emergency powers to impose the Liberation Day tariffs exceeded his legal authority, effectively striking down the 50% regime and leaving Brazil facing only the global 10% baseline tariff. By June 2026, Washington had opened a new front: the Office of the U.S. Trade Representative proposed a 25% tariff under a Section 301 investigation, citing Brazil's digital trade rules, intellectual property enforcement, ethanol market access, and deforestation as unresolved concerns.

What Brazil did instead of waiting

Brazil's government did not rely solely on diplomacy. Shortly after the July 2025 escalation, Congress passed the Economic Reciprocity Act, granting the executive branch authority to impose retaliatory measures on goods, services, investment, and intellectual property without needing prior WTO authorization — and waiving the most-favoured-nation principle so that countermeasures could be targeted specifically at the United States. Brazil also filed a formal WTO dispute against Washington in August 2025. In practice, however, the Lula administration has mostly held retaliation in reserve, opting instead to pursue a negotiated de-escalation: adjusting domestic social media and data-center policy to address U.S. complaints, opening talks on a bilateral critical-minerals and taxation agreement, and engaging directly with the Section 301 investigation.

Exporters, meanwhile, moved faster than diplomats. Despite the tariff turbulence, Brazil closed 2025 with record export revenue, up $11.6 billion year-on-year — even as shipments to the United States specifically fell by $2.6 billion. The gap was filled largely by Asia-oriented buyers, with trade analysts describing the shift not as a temporary reaction but as a structural realignment of Brazil's export geography toward new processing capacity and joint ventures outside the U.S. market.

The macro backdrop

The tariff conflict has unfolded against a domestic economy that the IMF describes as resilient despite multiple shocks. Brazil's central bank cut its benchmark Selic rate to 14.75% in 2026, part of a gradual easing cycle, while growth is projected by the IMF to strengthen to around 2.5% over the medium term. The IMF has specifically noted that Brazil is relatively insulated from global oil-price increases — stemming from the Iran conflict — given its status as a net oil exporter and its high share of renewable electricity. Inflation, however, has surprised to the upside, partly due to those same global energy pressures, leaving the central bank with less room for aggressive rate cuts than previously expected.

What's still unresolved

None of this is settled. The Section 301 proposal floated in June 2026 has not been finalized, and Brazilian officials have publicly disputed its deforestation-related justification by citing INPE satellite data showing record-low Amazon clearing. Trump has also separately threatened a 25% tariff on any country doing business with Iran — a category that technically includes Brazil, whose trade with Iran represents a small fraction of total exports, though Washington has not yet acted on that threat. With Brazil heading toward general elections in October 2026, trade policy is likely to remain a live political issue on both sides of the relationship for the rest of the year.

Carolina Mendes

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