A new 25% US tariff on a range of Brazilian goods came into effect on Wednesday, escalating trade tensions between the United States and Brazil despite Washington maintaining a trade surplus with the South American nation.The new duties apply to products including farm machinery, wood products, ethanol and apparel. However, the US has exempted several major imports such as beef, coffee, aircraft and aircraft parts to reduce the impact on trade, Reuters reported. The tariff is the first imposed under the US President Donald Trump administration’s new strategy of using the Trade Act of 1974 to investigate what it considers unfair trade practices. The move comes after the US Supreme Court earlier this year struck down the administration’s use of emergency powers to impose broad tariffs on trading partners.According to estimates by Brazil’s government and the National Confederation of Industry (CNI), the new tariff could affect between $7 billion and $11 billion worth of Brazilian exports to the US, representing around 18% to 26% of the country’s exports to the American market.Although Washington has cited concerns over issues such as electronic payment services, ethanol market access and illegal deforestation, Brazil is the first country targeted under a year-long Section 301 investigation despite the US consistently recording a trade surplus with Brazil.Former Brazilian foreign trade secretary Welber Barral described the move as ironic, pointing to the favourable trade balance the US already enjoys with Brazil.The tariffs also take effect just two days before a temporary 10% global tariff expires and follow an earlier Supreme Court ruling that struck down previous 50% US duties on Brazilian goods.The Brazilian footwear industry, which counts the US as its largest export market, has already lowered its export forecast for the year.The Brazilian Footwear Industries Association (Abicalçados) now expects exports to decline 7.1%, compared with an earlier projection of a 3.6% fall.The US accounts for one in every five pairs of shoes exported from Brazil.Economists have warned that repeated tariff changes and partial exemptions could have lasting consequences beyond immediate export losses.According to CNI data, Brazilian exports to the US have already fallen by $2.6 billion, or 13%, during the first half of this year compared with the same period in 2025, mainly due to lower exports of industrial products such as iron and steel, petroleum oils and wood pulp.Brazil is also facing a separate US investigation into alleged forced labour practices, due to conclude on July 24. The probe could result in an additional 12.5% tariff, potentially raising total duties on some Brazilian products to 37.5%.Brazilian Trade Minister Marcio Elias Rosa said officials are still awaiting clarity on how any additional penalty would be implemented.“We will find out if it will be cumulative or not, whether we will have 25% plus 12.5% or if we will get an exemption,” Rosa told reporters in Brasília.
