US-Brazil Trade Fallout
By: Carol Schwam Marquez
Edited by: Devon Gura and Olivia Paik
On July 30, 2025, President Donald J. Trump signed an Executive Order imposing an additional 40% tariff on Brazil, bringing the total tariff on Brazilian imports to 50%. [1] In the Fact Sheet released by the White House, these additional tariffs were justified by President Trump as “protecting national security, foreign policy, and economy of the United States from a foreign threat.” [2] However, these additional tariffs were not implemented because of clear economic risks, but instead were motivated by Brazil’s internal political developments. As described by Eléonore Hughes of AP News, the further additional 40% tariffs imposed on Brazil by President Trump were motivated by the “trial of his ally, former President Jair Bolsonaro, which [President Trump] called a ‘witch hunt’.” [3]
As explained by the Congressional Research Services, Congress has the primary power over US trade policy, and these policies have been focused on advancing US economic growth and competitiveness. [4] However, during the Great Depression, Congress granted the Executive branch more power through the Reciprocal Trade Agreement Act of 1934. This was furthered by President Kennedy who signed the Trade Expansion Act, which under Section 232 allows the President to impose tariffs based on national security issues. [5] Although Section 232 was created to be used in more threatening security situations, it has been increasingly used to carry out political agendas rather than defending the country from actual security threats, as seen in the case of the current tariffs placed on Brazil.
Tariffs are taxes imposed on imports of goods and services from other countries. Governments will often impose tariffs to protect domestic industries, negotiations, and to raise revenue. Even though domestic tariffs protect certain domestic industries, they ultimately raise prices for consumers and sellers. [6] The effect of tariffs is not felt by just the single seller of the goods, but often causes a ripple effect as well. According to economist Clarissa Hahn of Oxford Economics, “some domestic industries have global supply chains that rely on imported materials and parts.” [7] These tariffs are felt by most importers, consumers, and companies that rely on these goods and services.
As seen through the global supply chain, trade is extremely interlinked in today's international economic system. The US is one of Brazil’s largest trading partners, with the total goods and services trade between the two countries estimated at $127.6 billion in 2024. Leading up to 2025, the relationship between the two countries was often stable. In fact, both countries entered the Agreement on Trade and Economic Cooperation (ATEC) in 2011, and in 2022 expanded with the Protocol Relating to Trade Rules and Transparency. [8] The ATEC and the Protocol were implemented to create mechanisms to facilitate trade, investment, provide transparency, promote anti-corruption measures, and encourage cooperation, along with many more goals. [9] It was clear that both countries wanted to extend their trade ties, making those repeated trade interactions easier and more reliable by forming agreements like this.
The 2025 US tariffs demonstrate a turning point in the relationship between the US and Brazil, as the United States moved away from the cooperative nature of ATEC. These policies were extremely detrimental for Brazil. In 2024, Brazil exported a total of $40.8 billion to the United States. [10] The extreme 50% tariffs caused a huge shock to Brazilian markets, as manufacturers needed to come up with strategies to make their products attractive in the American markets. However, that was not always feasible due to the monetary loss the manufacturers would pay out of their own pockets to offset the tariffs. The impact was also felt by American consumers. According to AP News, “record-high beef prices” have been a concern for many Americans, and are largely the effect of tariffs on Brazil, a major beef exporter. [11]
Brazil also remains at a disadvantage in any trade policy or agreement made with other countries because its membership in Mercosur limits its ability to act independently. Mercosur is a regional integration process that links South American countries and their economies. [12] Under Article 1 of the Treaty of Asunción, Brazil and other members of Mercosur establish a “common external tariff… and the adoption of a common trade policy.” [13] This restricts Brazil, unlike the United States, as it cannot easily lower its tariffs unilaterally, so Brazil’s trade policies are often confined. Additionally, Brazil itself does place high tariffs on non-Mercosur states, but it is not discriminatory and directed at US products, as Brazil does this with all trade partners. [14]
The economic impacts that Brazil has faced have evolved into political tensions between the US and Brazil. As mentioned before, the tariffs imposed by President Trump were more politically than economically motivated. In an Executive Order made by Trump in July of this year, Trump used the International Emergency Economic Powers Act (IEEPA), the National Emergency Act, the Trade Act of 1974, and section 301 of title 3 to impose tariffs on Brazil. The order claims that members of the Brazilian government have not only interfered with the US economy, but also violated the free expression of Americans and human rights of former President Bolsonaro. [15] However, Trump has used these claims to attempt to interfere with Brazil’s domestic political and legal affairs, instead of dealing with security or economic threats. The human rights violations he claims attack Alexandre de Moraes, the supreme court justice overseeing the case against Bolsonaro, who was being accused of attempting to stage a coup to prevent current president Luiz Inácio Lula da Silva from taking office. The US has sanctioned Alexander de Moraes under the Magnitsky Act, which was originally designed to defend against severe human rights abuses and corruption under Vladimir Putin’s regime. [16] Through these Executive Orders, President Trump is effectively targeting the judicial system of Brazil with significant charges. This is a significant and often uncommon interference into a country’s political system, which seems to be deeply rooted in his support of former President Bolsonaro.
The total 50% US tariff on Brazilian imports was the highest rate of any country in the world. [17] According to AP News, this “led to the worst US-Brazil relations in history.” [18] In response to recent tensions, Brazil has turned to strengthening its political and economic ties with other countries, especially China. Brazil did not face the huge collapse expected from the tariffs because China received Brazilian goods in large amounts. According to reporting by The Rio Times, from August to October Brazil's exports to China increased by 25.7 percent, totaling to $27.1 billion dollars. Without China, Brazil’s economy would have suffered. Other countries also aided in keeping Brazil’s economy afloat, for example, Chile, Mexico, and Russia imported more Brazilian beef, and Japan and the Netherlands imported more coffee. [19]
However, the tension between the two countries seems to be decreasing after recent meetings between both countries' presidents, showing both sides attempting to stabilize relations. Both countries have realized they benefit from having secure trade relations. The US understands it needs Brazil for several agricultural goods and produce, and Brazil relies on the US for manufactured goods and investment. Due to several pressures from domestic consumers over the prices of grocery store goods, the Trump administration has eased the tariffs on certain goods. However, the 40% tariff still remains on products like coffee, beef, and tropical fruits. Even though the administration has reduced tariffs on certain goods, President Trump increased the amount of goods with additional tariffs. Before, 23% of Brazilian imports had tariffs, and now it is 26%. [20]
Although the decrease in tariffs appears to be a step in the right direction to restore relations between the two countries, the tension persists. These changes in tariffs may benefit the average American consumer, but there haven’t been many steps taken to rebuild the relationship between the two countries long-term. If the United States commits to keeping stable trade policies and agreements with Brazil, the two nations might slowly rebuild the relationships and cooperation they had before, like in ATEC. However, if the tariffs continue to be an unpredictable and politically motivated punishment, the relationship may suffer long-term damage, potentially pulling Brazil away from US relations in the future.
Notes:
1. The White House, “Fact Sheet: President Donald J. Trump Addresses Threats to the United States from the Government of Brazil,” 30 July 2025,
https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-add resses-threats-to-the-united-states-from-the-government-of-brazil/
2. Ibid.
3. Eléonore Huges “Brazilian coffee, beef, and tropical fruit will still be tariffed 40%, says Brazil’s vice president,” AP News, 15 November 2025,
https://apnews.com/article/brazil-us-tariff-coffee-meat-fruit-a7c9af4efd87f49d282d43cdb 04e618d
4. Congressional Research Service, U.S. Trade Policy: Background and Current Issues (CRS Report IF10156). https://www.congress.gov/crs-product/IF10156
5. Yeutter Institute, “Who has the Authority to Impose Tariffs and how does this Affect International Trade?”
https://yeutter-institute.unl.edu/who-has-authority-impose-tariffs-and-how-does-affect-int ernational-trade/
6. Oxford Economics, “Tariffs 101: What are they and how do they work?” https://www.oxfordeconomics.com/resource/tariffs-101-what-are-they-and-how-do-they work/
7. Ibid.
8. Office of the US Trade Representative, “Brazil,”
https://ustr.gov/countries-regions/americas/brazil
9. Office of US Trade Representative, Protocol Relating to Trade Rules and Transparency Under the US-Brazil ATEC (2022),
https://ustr.gov/sites/default/files/files/agreements/tifa/ATEC%20US-Brazil%20Protocol. pdf
10. Trading Economics, “Brazil Exports to United States,”
https://tradingeconomics.com/brazil/exports/united-states
11. Eléonore Huges “Brazilian coffee, beef, and tropical fruit will still be tariffed 40%, says Brazil’s vice president,” AP News, 15 November 2025,
https://apnews.com/article/brazil-us-tariff-coffee-meat-fruit-a7c9af4efd87f49d282d43cdb 04e618d
12. MERCOSUR, “MERCOSUR in Brief,”
https://www.mercosur.int/en/about-mercosur/mercosur-in-brief/
13. Jan Peter Schmidt, “MERCOSUR,” in Max Planck Encyclopedia of Public International Law, accessed 16 November 2025,
https://opil.ouplaw.com/display/10.1093/law:epil/9780199231690/law-9780199231690-e 655?d=%2F10.1093%2Flaw%3Aepil%2F9780199231690%2Flaw-9780199231690-e655 &p=emailAQsnZdvErnrPY&print#
14. Atlantic Council, “The Numbers that Define the US-Brazil Trade Partnership," July 2025, https://www.atlanticcouncil.org/blogs/new-atlanticist/the-numbers-that-define-the-us-brazil-trade -partnership/
15. The White House, “Addressing Threats to the United States,” Presidential Action, 30 July 2025,
https://www.whitehouse.gov/presidential-actions/2025/07/addressing-threats-to-the-us/ 16. Katherine Doyle, “Trump hits Brazilian products with 50% tariffs over Bolsonaro,” NBC News, 13 November, 2025,
https://www.nbcnews.com/politics/trump-administration/trump-brazilian-products-tariffs bolsonaro-rcna222534
17. Ibid.
18. Eléonore Huges “Brazilian coffee, beef, and tropical fruit will still be tariffed 40%, says Brazil’s vice president,” AP News, 15 November 2025,
https://apnews.com/article/brazil-us-tariff-coffee-meat-fruit-a7c9af4efd87f49d282d43cdb 04e618d
19. Richard Mann, “China Trade Offsets Brazil’s Export Losses To The United States,” The Rio Times, 16 November, 2025,
https://www.riotimesonline.com/china-trade-offsets-brazils-export-losses-to-the-united-st ates/
20. Eléonore Huges “Brazilian coffee, beef, and tropical fruit will still be tariffed 40%, says Brazil’s vice president,” AP News, 15 November 2025,
https://apnews.com/article/brazil-us-tariff-coffee-meat-fruit-a7c9af4efd87f49d282d43cdb04e618d
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Congressional Research Service. US Trade Policy: Background and Current Issues (CRS Report IF10156). https://www.congress.gov/crs-product/IF10156
Doyle, Katherine. “Trump hits Brazilian products with 50% tariffs over Bolsonaro.” NBC News, 13 November, 2025.
https://www.nbcnews.com/politics/trump-administration/trump-brazilian-products-tariffs-bolson aro-rcna222534
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