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The reason is the 37.5% tariff applied by the Trump administration on Brazilian exports, to be adopted by the United States Trade Representative (USTR). However, the American sanctions will not have immediate application, as they will undergo public consultations and hearings in that country, scheduled for next July 7.
Defeated by the Supreme Court, Trump resorts to the Trade Act of 1974
After the U.S. Supreme Court decided to overturn the 50% tariffs imposed in 2025, on the grounds that the legal basis used by the White House ‘was not appropriate’, the U.S. government resorted to the Trade Act of 1974, to create the rates of 25% and 12.5%.
According to the CNI (National Confederation of Industry), more than 1/3 of Brazilian external sales are expected to be affected by the measure. However, if sectoral tariffs already applied (based on section 232) are considered, the number of national products affected could reach 54.1% of the total.
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A man went to the supermarket in China with the salary of a single day’s work, and what he put in the cart will make any Brazilian question why they pay so much to eat so little.
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Louvre sees $102 million worth of jewels disappear in daring heist, and now the crime that shocked Paris will hit the screens
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The claw machine may seem like a shopping mall game, but a man who started from scratch has 1,000 of them spread across Brazil and earns R$ 800,000 per month while the claw holds the entire business together.
CNI: measure does not benefit either side
Pointing out that the tariff is likely to impact the production chains of both countries, the president of the confederation, Ricardo Alban, comments that “the potential imposition of new tariffs does not benefit either side. They would increase costs for companies, reduce competitiveness, and create uncertainties for investments. The most efficient path is dialogue, based on technical criteria and the search for solutions that preserve a strategic economic partnership for both countries.”
The list of items subject to the 37.5% tariff includes:
Non-alloy pig iron;
Cane sugar in solid form;
Inedible tallow;
Undenatured ethyl alcohol;
Pine standard wood moldings.
Products that may be subject to the 12.5% tariff:
Iron ore and concentrates, agglomerated pellets;
Quartzite slabs;
Essential oils of citrus fruits from oranges;
Silicon;
Chemical wood pulp, sulfate or soda, grades for dissolution.
At least in theory, Brasília has an ‘arsenal’ of alternatives to counter the ‘Trumpian’ tariff surge, such as retaliations at the WTO (World Trade Organization); application of mirrored surcharges on U.S. products; market diversification, aiming to reduce commercial dependency; granting of tax exemptions and credit incentives to exporters.
Among the possible government strategies, highlight:
Disputes at the WTO: activate the dispute resolution system of the World Trade Organization to challenge the legality of the tariffs.
Mirrored surcharges: raise import tariffs on strategic U.S. products as a proportional response.
Internal support: Reduce internal taxes or provide subsidized credit lines to compensate producers’ losses.
Market diversification: Intensify trade agreements and seek new partners in Asia and Europe to distribute the products.
Brazilian strategies, in contrast to Uncle Sam’s commercial ‘zeal’
Corn ethanol: taxing U.S. biofuel directly affects rural producers in the American Midwest (such as Iowa and Illinois), a historically decisive electoral base with a strong political presence in Washington.
Agricultural products and processed foods: imposing surcharges on goods like American wheat, cotton, and dairy products would force U.S. agricultural cooperatives to pressure the Trade Representative (USTR) to back down on barriers against Brazil.
Fuels and petroleum derivatives: although fuel oils are the most imported commodity by Brazil from the U.S. (generating billions of dollars), the Brazilian government needs to carefully calibrate this taxation. While it punishes Texan refineries, it also risks passing inflation to national fuel stations.
Aerospace components and high technology: Brazil imports turbines, engines, and aircraft parts crucial for the national production chain (such as Embraer’s inputs). Taxing this sector would affect large North American corporations but would have the side effect of increasing costs for the Brazilian manufacturing industry itself.
Under the directive to expand, diversify markets, and reduce commercial dependency on the U.S., the federal Executive advances in negotiations with the European Union and the European Free Trade Association (EFTA), not to mention negotiations with countries like the United Arab Emirates and Canada; and dialogues have progressed with India and Vietnam.
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