Starting at 12:01 a.m. on July 22nd (Eastern Time), the United States will impose a 25% Section 301 tariff on goods originating from Brazil.
Fertilizers and agricultural intermediates are not included in this round of tariff increase. The exemption list covers tariff chapters such as fertilizers (Chapter 31), organic chemicals, plastics, rubber, etc. The short-term cost structure of Brazilian agricultural imports will not directly deteriorate due to this round of tariffs. China’s exports of pesticide raw materials and intermediates to Brazil will not be directly impacted;
Coffee, beef, energy, etc., which are the major exports from Brazil to the United States, are also exempted. This tariff increase actually covers less than 30% of Brazil’s total exports to the United States. The nature of this is more like precise pressure on specific industries and political issues rather than comprehensive trade sanctions;
The Section 301 tariff on forced labor (estimated at 12.5%) will be announced around July 24th. Once it takes effect and is combined with this 25% tariff, the total tariff burden of Brazilian goods on the United States will rise to 37.5%. It is necessary to continue to follow up.
The Brazilian presidential election in October and this tariff dispute have already generated political linkage. If the US-Brazil relationship continues to be under pressure, referring to the precedent of Brazil’s soybean exports to China increasing during the 2018 Sino-US trade friction, the possibility of Brazil tilting towards China in agricultural input procurement and commodity trade partner selection is worthy of attention. This is a potential positive signal for Chinese agrochemical export enterprises’ market layout in Brazil.
Details of Tariff Implementation
On July 15th local time, the United States Trade Representative Office (USTR) issued a notice, imposing a 25% Section 301 tariff on imported goods originating from Brazil. The tariff code is 9903.05.01 (excluding 9903.05.02 – 9903.05.09). This tariff applies to goods entering the United States or being extracted from warehouses for consumption starting from 12:01 am on July 22, 2026, Eastern Time.
Under the instructions of the president, US Trade Representative Grier took the final action in accordance with Section 301 of the 1974 Trade Act. Prior to this, the USTR conducted a one-year investigation and determined that Brazil’s practices in areas such as digital trade and electronic payment services, unfair preferential tariffs, anti-corruption interference, intellectual property protection, ethanol market access, and illegal deforestation were unreasonable, imposing burdens or restrictions on the commercial activities of American farmers, workers, innovators, and exporters. This action was taken after the USTR held two public hearings, received over 360 public opinions, and conducted intensive negotiations with the Brazilian government.
Goods in transit are exempt from additional duties under the following conditions: They have been loaded onto the ship before 12:01 a.m. on July 22 (Eastern Time) and are in the final stage of transportation, ready to enter the United States. They must either enter the United States before 12:01 a.m. on July 29 or be extracted from the warehouse for consumption.
Exemption Scope
This tax increase does not apply to the following categories:
Raw materials for which taxation may lead to a shortage of domestic supply in the United States;
Products for which taxation may cause an industry-wide disruption;
Products for which the United States cannot produce at a reasonable price or cannot obtain in large quantities from other sources;
Products that do not contribute significantly to the elimination of relevant policies and practices in Brazil that are deemed actionable;
Information materials, donated items, carry-on luggage;
Items subject to the 232 tariff restrictions and their components (following the principle of exclusivity to avoid double imposition).
In addition to the products explicitly listed in the attachment of the announcement, the USTR also granted additional exemptions for aluminium hydroxide, antique collectibles and artworks, ash containing precious metal compounds, some animal fur and leather products, some seafood, some medicines and pharmaceutical ingredients, some wood products, steel scrap and waste materials, organic honey, pig iron, flavorless instant coffee, used clothing, etc. The tariff chapters covered by the exemption in the attachment also include medicine (Chapter 30), fertilizers (Chapter 31), tanning and dyeing extracts (Chapter 32), essential oils (Chapter 33), soap and surfactants (Chapter 34), other chemicals (Chapter 38), plastics (Chapter 39), rubber (Chapter 40), etc. Based on various calculations, the actual value of goods covered by this tariff is less than 30% of Brazil’s total exports to the United States. Major categories of Brazil’s exports to the United States, such as coffee, beef, orange juice, Brazil nuts, iron ore, crude oil, rare earths, fertilizers, organic chemicals, aircraft and aviation components, etc., are all included in the exemption list.
Goods imported from Brazil and affected by the new tariffs continue to be subject to the current anti-dumping and anti-subsidy taxes. Moreover, this round of tariffs will be added to the tariffs imposed by the USTR on Brazil in the 301 clause investigation on forced labor. The investigation is expected to conclude around July 24th and the proposed tax rate is 12.5%.
Political background
This investigation was initiated on July 15, 2025. At the same time, Trump had announced a 50% tariff increase on Brazil and accused its government of violating human rights. This tariff was later withdrawn. This round of tariff increase was related to the background of the US’s pressure on Brazil regarding the trial of former president Bolsonaro, and also formed a linkage with the upcoming Brazilian presidential election in October – Lula accused the son of Bolsonaro’s senator, Flavio, of facilitating this tariff increase after his visit to the US. Flavio denied this and stated that he would strive to push for the postponement of the tariff implementation until after the election. Lula expressed on social media that the tariff increase decision was baseless and said that he would take countermeasures.
The subsequent nodes that need to be monitored
Around July 24th: The results of the 301 clause tariffs on forced labor will be announced. Will it be combined with the current 25% tariff to reach 37.5%?
July 22nd to 29th: During the exemption period for in-transit goods, enterprises involved in shipping from Brazil need to verify the bills of lading and the arrival times at the port.
October: The Brazilian presidential election, the degree of politicization of the tariff issue, and the strength of the Brazilian hardliners towards the United States will affect whether Brazil will further adjust its agricultural input procurement from China and its trade arrangements for bulk commodities.
Post time: Jul-22-2026
