Brazil–U.S. Tariffs: From the 50% Threat to the Actual 37.5%

After more than a year of back-and-forth, the tariff package Donald Trump applied to Brazil has reached a more stable format, but it is still far from final. Today, most Brazilian products entering the United States pay a combined tariff of 37.5%, while steel and aluminum remain taxed at 50%. For anyone structuring a business or an investment between the two countries, understanding how that number was reached — and what can still change — is essential to reviewing contracts and projections.

Timeline: from the 50% threat to the 37.5% tariff in force today

In July 2025, Trump announced he would apply a 50% tariff on virtually all Brazilian products, citing as justification the trial of former president Jair Bolsonaro at the Supreme Federal Court, which he described as political persecution. The measure took effect on August 6 of that year, with a list of exceptions that included civil aircraft, orange juice, oil, pig iron, precious metals, pulp, and fertilizers.

That tariff was built on the International Emergency Economic Powers Act (IEEPA) of 1977, which gives the president broad powers in national emergencies. On February 20, 2026, however, the U.S. Supreme Court ruled 6–3 that the IEEPA does not authorize the president to create tariffs unilaterally. The case, Learning Resources v. Trump, was led by Chief Justice John Roberts and struck down the general tariffs based on that law worldwide, including a large share of those applied to Brazil.

The decision did not zero out the bill. Tariffs grounded in other statutes, such as Section 232 (national security, which keeps steel and aluminum at 50%) and Section 301 (unfair trade practices), remained in force. It was a parallel Section 301 investigation, combined with an inquiry into forced labor, that produced the tariff in effect today: a 25% general tariff plus an additional 12.5%, totaling 37.5% on items such as footwear, textiles, furniture, ethanol, and machinery. The new rate took effect on July 24, 2026, with exemptions kept for coffee, beef, oil, pulp, and civil aircraft.

What this means in practice for those operating in both countries

For companies and investors operating between Brazil and the United States, three points deserve immediate attention.

The first is legal: the basis for the 37.5% tariff (Section 301 plus the forced-labor investigation) is different from the one the Supreme Court already struck down, but it remains open to challenge and should not be treated as final. Companies that signed contracts with a tariff pass-through clause, or that project margins using the current rate, are well advised to plan for revision scenarios.

The second is sector-specific: not every product is subject to 37.5%. It is worth checking the exception list item by item (coffee, beef, oil, pulp, civil aircraft) and remembering that steel and aluminum remain on a separate track, with a 50% tariff that was not affected by the Supreme Court decision.

The third is political: the Brazilian government has already signaled that it may take the case to the World Trade Organization and apply the Economic Reciprocity Law, regulated this year. Any Brazilian retaliation tends to hit specific products and sectors, which reinforces the need to follow the news closely before closing medium- and long-term operations with the U.S. market.