Brazil threatens Trump with immediate retaliatory tariffs
A major trade war has erupted in the Americas. Brazil has threatened immediate economic retaliation and a formal challenge at the World Trade Organization (WTO) after the Trump administration slapped a sweeping 25% tariff on most Brazilian imports.
The penalizing tariffs, set to take effect on July 22, 2026, mark a significant escalation in strained relations between Washington and Brasília. It is the first action under a revamped U.S. trade strategy utilizing Section 301 investigations. This strategy was drawn up after the U.S. Supreme Court struck down the administration’s previous global emergency tariff system earlier this year, News.Az reports, citing Anadolu Agency.
Following a yearlong investigation, the Office of the U.S. Trade Representative (USTR) concluded that Brazil’s domestic policies structurally disadvantage American commerce. The USTR cited several specific grievances:
The U.S. argues that Brazil’s highly successful, state-backed instant payment system, Pix, unfairly disadvantages American credit card companies.
U.S. officials claim Brazil’s failure to stop illegal Amazon deforestation gives its agricultural sector an unfair competitive advantage.
The U.S. pointed to Brazilian court orders that have heavily fined or blocked American tech platforms.
The government of leftist President Luiz Inácio Lula da Silva swiftly condemned the tariffs as “an act without economic justification”. Brasília announced it would immediately invoke its domestic Economic Reciprocity Law to slap equivalent mirror tariffs on incoming American products.
Lula rejected the USTR’s claims of unfair trade, pointing out that the U.S. has accumulated a massive $424.5 billion trade surplus with Brazil over the past 15 years. He noted that 76% of all U.S. imports currently enter Brazil completely duty-free.
To prevent severe supply chain disruptions at home, the White House carved out exemptions for critical Brazilian commodities that the U.S. does not produce in high volumes. Beef, coffee, orange juice, and civil aircraft parts will remain unaffected. However, thousands of other goods—including sugar, steel, apparel, and industrial machinery—will face the new 25% levy.
The timing of the trade dispute is highly charged. Brazil is gearing up for a pivotal presidential election in October, where Lula will face off against conservative Senator Flávio Bolsonaro—the son of former President Jair Bolsonaro.
The trade war originally began in 2025 when the Trump administration levied tariffs to protest the “witch hunt” prosecution of Jair Bolsonaro over his role in an attempted coup. While some of those initial tariffs were rolled back, this new round represents a systemic shift.
U.S. Secretary of State Marco Rubio blamed Lula directly on social media, claiming the president put “his own ego ahead of making a deal”. Meanwhile, Flávio Bolsonaro has blamed Lula’s “reckless” policies for harming the country. Yet, recent polling in Brazil suggests the dispute may backfire politically for the opposition, as more than half of Brazilians currently blame the Bolsonaro family for triggering the U.S. economic penalties.
Worse still for Brazil, the economic pain could deepen. The USTR is concluding a separate Section 301 investigation into forced labor in global supply chains, which could tack an additional 12.5% tariff on Brazilian goods by the end of July.