The Office of the United States Trade Representative has finalized a Section 301 action against Brazil, imposing an additional 25% tariff on most Brazil-origin goods entered for consumption, or withdrawn from warehouse for consumption, beginning at 12:01 a.m. Eastern Time on July 22, 2026.

The USTR's action follows an investigation into Brazilian trade practices that the United States determined to be unreasonable or discriminatory and to burden or restrict U.S. commerce. The investigation covered six distinct areas:

1. Digital-trade and electronic-payment restrictions — Brazilian regulations limiting cross-border data flows and restricting foreign participation in electronic-payment systems
2. Intellectual-property enforcement — Gaps in Brazil's enforcement of patent, copyright, and trademark protections
3. Ethanol market access — Brazilian tariff and non-tariff barriers limiting U.S. ethanol exports
4. Preferential tariff arrangements — Brazilian trade preferences that disadvantage U.S. goods
5. Anti-corruption issues — Concerns regarding Brazil's anti-corruption enforcement framework
6. Illegal deforestation — Brazilian practices related to illegal deforestation affecting U.S. agricultural and environmental interests

The additional 25% tariff applies to most Brazil-origin goods entered for consumption or withdrawn from warehouse for consumption on or after July 22, 2026. The tariff is imposed in addition to all other applicable duties, fees, and charges.

The measure contains specific product exemptions. Goods already covered by specified Section 232 measures are excluded. Additional listed categories are also exempt, including:

• Certain aircraft and parts
• Energy products (including oil, gas, and related products)
• Pharmaceuticals
• Pig iron and scrap
• Instant coffee
• Seafood
• Hides and skins
• Wood products
• Aluminum hydroxide

Importers should carefully review the annexes to the Federal Register notice to determine whether specific HTS subheadings fall within these exemptions.

Covered merchandise admitted to a U.S. foreign-trade zone on or after the effective date generally must enter under privileged foreign status. This means the goods will be subject to the additional 25% tariff upon entry into U.S. commerce, regardless of any transformation or manufacturing that occurs within the FTZ. Importers currently using FTZ arrangements for Brazil-origin goods should immediately assess the impact of this requirement.

Importers and customs brokers should take the following steps before July 22, 2026:

• Map HTS classifications against the annexes to the Federal Register notice to identify which products are covered and which are exempt
• Recalculate landed costs for all Brazil-origin goods to reflect the additional 25% duty
• Verify country of origin for goods that may have undergone processing in Brazil but originated elsewhere
• Review bonded warehouse and FTZ arrangements to assess the impact of the privileged-foreign-status requirement
• Audit open purchase orders and shipments in transit to determine exposure

U.S. exporters selling to Brazilian buyers and manufacturers sourcing inputs from Brazil should:

• Assess supply-chain exposure and identify alternative sourcing options
• Review pricing arrangements with Brazilian suppliers and customers
• Evaluate the impact on competitiveness in markets where Brazilian and U.S. goods compete

Contracts involving Brazil-origin goods should be reviewed and, where appropriate, amended to address the additional tariff. Key contractual provisions include:

• Tariff-adjustment clauses — Provisions allocating the cost of new or increased tariffs between buyer and seller
• Change-in-law clauses — Provisions addressing the impact of new legal requirements on contract performance
• Incoterms — The chosen delivery term determines which party bears the duty obligation; DDP (Delivered Duty Paid) arrangements may require renegotiation
• Reimbursement provisions — Clauses requiring one party to reimburse the other for increased duty costs
• Termination rights — Force majeure or material adverse change provisions that may be triggered by the tariff increase
• Supplier-indemnity provisions — Clauses requiring suppliers to indemnify buyers for duty costs arising from misclassification or incorrect origin declarations

Commodity traders dealing in Brazilian agricultural products, metals, and other commodities should reassess open positions, hedging strategies, and pricing formulas in light of the additional duty burden.

This alert is provided for informational purposes only and does not constitute legal advice. For guidance on how the USTR Section 301 Brazil tariff may affect your specific import, export, or contract obligations, please contact ULF New York.