25% Tariff on Brazil-origin goods entering the United States: now in effect 

This article was co-authored by Luke P. Engan and Fernando Martins 

US tariffs on Brazilian imports just jumped by 25%, and the rules are still moving. Here’s what businesses need to check now, and where the exemptions still stand. 

In brief 

A new 25% tariff now applies to most Brazil-origin goods entering the United States, generally on top of existing customs duties and trade-remedy tariffs. The measure may materially increase landed costs and affect pricing, supply contracts, and ongoing shipments. 

Some goods may be exempt, or may qualify for alternative customs treatment, depending on their HTSUS classification, country of origin, transit status, intended use and overlap with other tariff regimes. Potential avenues include the exemptions in the final annexes, certain Chapter 98 provisions, Section 232 overlap, foreign-trade-zone treatment, and duty drawback. No general product-specific exclusion process has been announced, so eligibility must be assessed shipment by shipment. 

Urgent action is required. Businesses with cargo afloat or entries pending should immediately confirm eligibility, preserve supporting documentation, and complete the necessary entry filings. Importers should also carry out a line-by-line review of upcoming shipments to identify exemptions, quantify exposure, and determine whether contractual or supply-chain action is needed. 

What was done, and by whom 

On July 15, 2026, the President Donald Trump issued a memorandum directing action, and the Office of the U.S. Trade Representative published a Federal Register notice of final action the same day. 

The action concludes a Section 301 investigation initiated on July 15, 2025, into six categories of Brazilian conduct: 

• Digital trade and electronic payment services 

• Unfair preferential tariffs 

• Anti-corruption enforcement 

• Intellectual property protection 

• Ethanol market access 

• Illegal deforestation 

Effective at 12:01 a.m. ET on July 22, 2026, an additional 25% ad valorem duty applies to substantially all goods that are products of Brazil and are entered into the United States. The duty generally applies in addition to ordinary customs duties and certain other trade-remedy duties. 

The duty is a negotiating instrument of indefinite duration, not a fixed cost, and may be modified, expanded, or withdrawn on short notice. USTR has stated that negotiations with Brazil may continue and that it will monitor the action and consider whether modification or termination is appropriate under Section 307 of the Trade Act. The scope, rate and duration may therefore change. 

Scope and exemptions 

The duty reaches substantially all Brazil-origin goods, subject only to carve-outs set out in Annexes I and II. Exempt categories include: 

• Qualifying in-transit goods 

• Enumerated HTSUS subheadings (beef, oranges, iron ore pellets, aluminum oxide, certain wood products, spices, stone, dietary supplements, and others added after public comment including organic honey, pig iron, unflavored instant coffee, and used clothing) 

• Civil aircraft and parts 

• Articles for use in pharmaceutical applications 

• Articles and parts covered by specified Section 232 measures — aluminum, steel, copper and derivatives; passenger vehicles, light trucks, medium and heavy-duty vehicles and parts; wood products; semiconductors 

• Humanitarian donations, informational materials, and accompanied personal baggage 

• Goods properly entered under qualifying Chapter 98 provisions, subject to important exceptions and value limitations  

Potential relief and future modifications 

The final notice does not currently establish a general product-specific exclusion application process. Businesses should therefore not assume that an individual hardship application will suspend or eliminate the duty. 

There may nevertheless be several potential avenues for relief, depending on the product and transaction: 

• Classification and scope review: A product may already fall within an exempt HTSUS provision or a use-specific carve-out. Where classification is uncertain, an importer may consider seeking a binding ruling from CBP.  

• Country-of-origin analysis: The tariff applies to products of Brazil, not merely goods shipped from Brazil. For goods incorporating inputs or processing in more than one country, the applicable origin rules and substantial-transformation analysis should be reviewed carefully.  

• Chapter 98 treatment: Certain returned goods, temporary imports and other qualifying entries may benefit from Chapter 98 treatment. The final notice contains exceptions for specified repair, processing, and overseas-assembly provisions, under which the additional duty may apply to only part of the entered value.  

• Duty drawback: Section 301 duties may generally be eligible for drawback where the statutory requirements are satisfied, including in connection with qualifying exports or destruction. The commercial benefit and recordkeeping burden should be assessed transaction by transaction.  

• Post-entry corrections and protests: Where duty has been paid because of an incorrect classification, origin determination or exemption claim, recovery may be possible through a post-summary correction before liquidation or a timely protest following liquidation.  

• Advocacy for modification: USTR has expressly reserved the ability to modify or terminate the action. Businesses and industry groups may consider presenting evidence supporting additional exemptions, particularly where there is inadequate non-Brazilian supply, a risk of serious economic disruption or limited connection between the product and the conduct targeted by the investigation.  

• Administrative or judicial review: Depending on the measure being challenged and the relevant procedural posture, affected importers and industry groups may wish to assess whether administrative or judicial review is available. Any potential route would require a fact-specific analysis of standing, jurisdiction, timing, available causes of action and likely commercial benefit. 

Immediate action items 

Run a line-item classification audit against the final annexes, not the June proposal, and quantify duty exposure by product line. 

Identify possible exemptions or relief routes. Review Chapter 98 treatment, pharmaceutical or aircraft-use provisions, Section 232 overlap, country of origin, drawback eligibility and any product-specific limitations. 

Revalidate previous costings. Do not rely on the proposed action annex in any land-cost model, purchase order or customer quotation prepared from June. Review those documents against the final annexes. 

Review foreign-trade-zone admissions. Brazil-origin goods subject to the duty must be admitted in privileged foreign status unless eligible for domestic status. The applicable classification and duty rate for privileged foreign merchandise are generally determined as of the date on which the application for privileged status is filed in complete and proper form. 

Review contracts and Incoterms. Determine who bears additional duties, whether tariff-change or change-in-law provisions apply, and whether prices, delivery terms or sourcing obligations can be adjusted.  

Preserve refund and challenge rights. Establish procedures for post-summary corrections, liquidation monitoring and timely protests, and consider whether a CBP ruling or coordinated industry submission to USTR is warranted.  

Stress-test alternative sourcing and processing structures. Any restructuring should be commercially genuine and comply with applicable origin, valuation and anti-circumvention rules. 

How gunnercooke can help 

Luke Engan and Fernando Martins advise importers, distributors, manufacturers and other businesses on tariff exposure, mitigation, and dispute matters. You can read more about Luke and his work HERE, and Fernando and his work HERE.