According to a new Executive Order, the U.S. is imposing an additional 40% on certain imports from Brazil, bringing the total tariff rate to 50%. Under the International Emergency Economic Powers Act (IEEPA), the duties are in response to polices, practices, and actions of the Brazilian government that threaten national security, foreign policy and economy of the U.S.
The duty will apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EDT August 6, with the exception of goods in transit when the action begins, as long as they enter before 12:01 a.m. EDT October 5.
Moreover, President Trump reserves the right to increase the additional IEEPA duty if Brazil retaliates. There is no express prohibition to claiming duty drawback on these tariffs at this time.
Further, the following scope and stacking order applies:
- The new duty does not apply to goods subject to existing or future actions under Section 232 of the Trade Expansion Act of 1962, which would currently include steel, aluminum, automobiles and automobile parts, and now copper (effective August 1).
- The new duty does not apply to goods provided for in 50 U.S.C. 1702(b), i.e. any postal, telegraphic, telephonic, or other personal communication;donations of food, clothing and medicine intended to relieve human suffering;merely informational materials;any transactions ordinarily incident to travel to or from any country, including importation of accompanied baggage for personal use.
- The new duty does not apply to goods set forth in Annex I (found at the bottom of the EO), including certain silicon metal, pig iron, civil aircraft and parts and components thereof, metallurgical grade alumina, tin ore, wood pulp, precious metals, energy and energy products, and fertilizers.
- The duty imposed in Executive Order 14257 of April 2, 2025 applies in addition to the new 40%, for a total of 50% tariff above the Most Favored Nation (MFN) rate due.
- Goods subject to the new duty and admitted into a foreign trade zone on or after 12:01 a.m. EDT August 6 must be admitted under "privileged foreign" status (per 19 CFR 146.41), unless the goods qualify for "domestic" status (per 19 CFR 146.43).
In addition to the additional duty, the office of the U.S. Trade Representative (USTR) on July 15 initiated an investigation of Brazil under Section 301 of the Trade Act of 1974. The investigation will seek to determine whether acts, policies, and practices of the Government of Brazil related to digital trade and electronic payment services; unfair, preferential tariffs; anti-corruption interference; intellectual property protection; ethanol market access; and illegal deforestation are unreasonable or discriminatory and burden or restrict U.S. commerce.
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