WASHINGTON—In June, the Office of the US Trade Representative unveiled preliminary findings of an ongoing Section 301 investigation, proposing a new 25 percent tariff on various Brazilian products.
This is only the latest development in what has been a very up-and-down year for US-Brazil trade (as our trade dashboard shows). It began with an initial series of tariffs applied throughout 2025, followed by the US Supreme Court’s February 2026 decision that limited the Trump administration’s use of the International Emergency Economic Powers Act to implement tariffs. Soon after, the administration imposed a global 10 percent tariff under Section 122, and now, Section 301 tariffs are taking shape.
Tariffs applied throughout the year have changed the trajectory of trade, commerce, and relations more broadly between the two countries. Yet, the two economies remain deeply intertwined, particularly in key sectors such as agriculture, metals and manufacturing, and aerospace. Here’s how the new proposed tariffs might further alter that relationship.
A new round of tariffs
Tariff pressure on Brazil has risen over many months. But Washington isn’t applying that pressure equally across the board, since it is treating products from Brazil in different ways. The proportion of Brazilian exports subject to US tariffs has shifted since Liberation Day, the day in April 2025 when Trump announced a sweeping list of tariffs. Today, around half of all Brazil’s exports are exempt (if applying today’s tariff codes to Brazil’s 2025 exports).
Despite multiple changes to tariff rates throughout the past year, the distribution of exempted Brazilian goods—even if the Section 301 tariffs were imposed—is set to remain broadly the same, at just over 50 percent. Yet the tariff pressure (the ratio between the tariffs charged and the total value of trade) is still set to rise significantly, given that around a third of exports, ones currently subject to a 10 percent tariff, might soon face a 25 percent rate instead.
A new bend in the track of a rollercoaster year
US imports of Brazilian products have declined this year in response to the succession of US tariff measures, which raised costs for Americans and reduced demand. Yet, despite the ongoing trade tensions, US exports to Brazil have continued to grow along the pre-2025 trendline. Consequently, in the year since Liberation Day, the US bilateral trade surplus with Brazil has more than doubled.
The chart below measures trade by net weight rather than dollar value, offering an alternate view of how the volume of goods has changed without the distortion of commodity price swings. To be sure, this weight could fluctuate due to several factors beyond changes in trade volume, such as a change in the assortment of goods traded. However, as of March 2026, yearly US imports from Brazil measured by weight stood approximately 10 percent lower than they had been in January 2025. At the same time, the total weight of US products heading for Brazil was 10 percent higher.
But the aggregate picture hides nuance, in that some products have been hit harder than others by the successive tariff waves. An analysis of US imports from Brazil by Broad Economic Categories—a UN-created classification which groups goods by their principal end use, including capital, intermediate, and consumer goods—shows that the weight of intermediate products has dropped off most dramatically. If that decline is a result of the tariffs, that would mean that the measures have hit manufacturing supply chains more than consumer-facing products.
In the past, the trade relationship has included strong flows of intermediate products, with only a minority of trade consisting of finalized consumer products. For examples of these intermediate products, look to Brazilian coffee beans, which are imported in bulk and then ground and mixed with other ingredients by US coffee roasters, or US advanced machinery components, which are used in the Brazilian automotive and aerospace industries. Throughout their trade relationship, the two countries have consistently exchanged inputs that are then used by recipient businesses to add value before re-exporting them or selling them to consumers as a final product.
A deeper look shows which intermediate products were most affected. Comparing US imports from Brazil in the year before Liberation Day and the year after, two of the hardest-hit categories were “basic food and beverages for industry” and “elaborated food and beverages for industry,” which saw the largest declines in net-weight supply.
More importantly, the category of “elaborated industrial inputs” represented almost 50 percent of the total net weight of yearly imports before Liberation Day. In the year that followed, the net weight of US imports from Brazil in this category fell by 5.7 percent. That accounted for most of the fall in the net weight of US imports of Brazilian goods. This category includes key inputs such as metals, chemicals, wood and pulp, leather, and other industrial supplies that are used in value-added industrial processes in US manufacturing.
The authors would like to thank Apex Brazil, the Brazilian Trade and Investment Agency, for its support for this project.