Updates with comments from US-Brazil commerce chamber Amcham.
US President Donald Trump signed an executive order to implement a 50pc tariff on Brazilian imports effective 6 August, escalating his support for former president Jair Bolsonaro into economic punishment against the current administration.
Trump previously set a 1 August deadline for the tariffs, but in the executive order signed Wednesday sets the effective date at "12:01am ET seven days after the day of this order," which would be 6 August. The order includes a grace period for items shipped before 6 August and arriving in the US before 5 October.
US imports from Brazil were already subject to a 10pc rate since 5 April. The new executive order preserves previously granted exemptions for energy commodities and several other products, including silicon metal, pig iron, civil aircraft parts and components, metallurgical grade aluminum, tin ore, wood pulp, orange pulp and juice, precious metals and fertilizers.
The White House executive order does not list Brazil-origin coffee among the items exempted from tariffs, even though commerce secretary Howard Lutnick indicated earlier this week that such exemption would be granted.
The executive order also clarifies that the new 50pc tariff rate will not be added on top of the sectoral tariffs on steel and aluminum, which are set at 50pc, or cars and auto parts, set at 25pc.
While most of the US' tariffs this year have been described as efforts to rebalance trade, the US typically has a trade surplus with Brazil, which was $7.4bn in 2024. The White House said today the Brazilian tariff is related to "recent policies, practices, and actions by the Government of Brazil that constitute an unusual and extraordinary threat to the national security, foreign policy, and economy" of the US.
The order declares a national emergency given Brazil's "unusual and extraordinary policies and actions harming" US companies, free speech rights, foreign policy and economy. It also mentions that members of Brazil's government "have taken actions to tyrannically and arbitrarily coerce US companies to censor political speech" and "deplatform users".
The order followed US sanctions on Brazilian supreme court justice Alexandre de Moraes, who is the presiding judge in a trial against former Brazilian president Jair Bolsonaro, who is facing allegations on an attempted coup.
Trump's initial threats called Bolsonaro's trial a "witch hunt", and said that the tariff was in part because of "Brazil's insidious attacks on Free Elections and the Fundamental Free Speech Rights of Americans". The latter is a reference to orders by judges in Brazil to suspend social media accounts for spreading "misinformation".
Brazilian president Luiz Inacio Lula da Silva posted on social media today an excerpt of his interview with The New York Times highlighting his comment that "In Brazil, the law is for everyone. The three branches of government are independent." He also highlighted that Brazil "will not negotiate as if it was a small country against a big country".
"Brazil will negotiate as a sovereign nation," he said.
Brazilian finance minister Fernando Haddad called the trade tensions between the two countries "artificial".
"[The tensions] are produced by people from [the US]," he said. "This tension will dissipate, rationality will prevail and we will reach a common ground."
US-Brazil chamber calls for dialogue
The US-Brazil commerce chamber Amcham called for "increased dialogue" between the nations, saying the tariff decision was worrisome.
"This measure weakens economic and trade relations between the two countries, negatively affecting the competitiveness of their companies, the employment of their workers and the purchasing power of their consumers", Amcham said, advocating for "high-level dialogue".
A survey conducted by the chamber between 24-30 July of Brazilian companies that export to the US found that over 50pc of them expect sales to the US to stop completely or significantly — meaning decrease by over 50pc — because of the tariffs.
Of the companies 86pc said any potential reciprocal action from Brazil would "worsen bilateral tensions and reduce space for negotiations".
Lula had said before that the country would consider reciprocal tariffs "in accordance with [the country's] economic reciprocity law".
