The imposition of new tariffs on Brazil cannot be understood outside the global international context and the competition for influence—especially economic—between China and the United States in Latin America. The announcement made last week that the U.S. government will maintain 25% tariffs on Brazilian products, following the public consultation period, is a consequence of this conjuncture.
The tariffs are the result of an investigation conducted under Section 301 of the Trade Act of 1974 (external link), which allows the United States Trade Representative (USTR), the agency responsible for U.S. trade negotiations, to investigate the trade practices of foreign partners. The investigation was launched after the U.S. Supreme Court suspended the reciprocal tariffs (external link) previously imposed under the IEEPA (International Emergency Economic Powers Act), another law authorizing the Executive branch to regulate international trade in situations of national security emergencies.
The USTR recommended (external link) the application of additional 25% tariffs on Brazilian products, on top of the 10% already in effect, claiming that Brazil engages in unfair trade practices. The main ones allegedly include illegal deforestation, piracy, deficiencies in enforcing anti-corruption legislation, tariffs on American ethanol, preferential agreements with Mexico and India, and the use of Pix. The document asserts that these result in a Brazilian trade surplus with the United States.
However, Brazil has actually run a trade deficit in this balance since 2009, meaning that the country imports more from than it exports to the United States. Moreover, several of the issues raised by the U.S. government rely on outdated data, such as the deforestation issue, which refers to the 2018–2022 period. (external link)
One of the investigation's main focal points was Pix, cited as an unfair competition mechanism against digital payment platforms of American Big Tech firms, such as ApplePay, GooglePay, and WhatsAppPay, as well as credit card networks like Visa and Mastercard. Nevertheless, it is worth emphasizing that Pix is a free service provided by the Central Bank of Brazil, which does not prevent the existence or operation of other payment methods in the country.
During the public hearings preceding the decision, the Brazilian government did not send official representatives. However, other spokespersons for interested sectors (external link) took part. From the productive sector, members of the National Confederation of Industry (CNI), FIESP, and AMCHAM (American Chamber of Commerce for Brazil) were present. Brazilian exporters of coffee, rice, industrial machinery and equipment, apparel and footwear, agriculture, and livestock also participated. Among the American producers who testified, some indeed favored the imposition of the tariffs. Yet, there were also industrial sectors reliant on resources and inputs from Brazil that warned of the damages the measure would inflict.
Although the public hearing was intended to hear technical arguments, the outcome confirmed expectations that the decision would be driven more by political considerations than commercial ones.
Influence of the international context
Today, China is the primary trading partner of several Latin American countries, including Brazil, as well as a major source of investment. At the same time, the U.S. National Defense Strategy (external link) treats the region as strategic to its national security. Therefore, the Trump administration tends to seek ways to strengthen its influence over Latin America.
Since Brazil is one of the leading economies and military powers in Latin America, this strategy largely involves aligning the country with U.S. interests. The designation of Brazilian criminal factions, such as the PCC and Comando Vermelho, as terrorist organizations (external link) can also be interpreted within this drive for control and influence over the region. After all, they create avenues to justify a potential military intervention on Brazilian soil, even if such a possibility remains unlikely in the current context.
Another relevant factor in this context is that Brazil is rich in critical mineral reserves of global interest (external link). For instance, quartz forms the foundation of the silicon supply chain. And materials such as manganese, niobium, nickel, and lithium are essential for battery technologies and electrification, which are crucial in the race for the energy transition. They even hold the potential to reduce American dependence on Chinese resources.
In this scenario, tariffs emerge as an instrument of political and economic leverage that has been widely deployed by the U.S. government. A substantial portion of them is not grounded in commercial rationale, as demonstrated in the Brazilian case. The objective is to compel countries to concede to agreements with asymmetric terms (external link) that are more favorable to U.S. interests.
Brazil's response
Brazil, however, refused to negotiate on these terms and began seeking direct channels of dialogue with the White House. Yet the new tariffs seek to ratchet up pressure on the Brazilian government. Should they continue to fail to produce the expected effects, a potential change of government in the October elections—one more closely aligned with American interests—would likely suit Trump's agenda.
In the short term, the primary impact will fall upon the Brazilian productive sectors affected by these tariffs. These are export segments such as footwear, apparel, ethanol, agricultural machinery, mining equipment, paper, and organic sugar (external link). At the same time, an extensive list of exemptions shields products such as coffee, meat, aircraft, and machinery and equipment. The exclusion of these products seeks to mitigate negative repercussions on the U.S. economy itself—whether through price increases for essential consumer goods, such as foodstuffs, or due to the significance of inputs for American industry.
Therefore, the Brazilian government should continue pursuing negotiation channels with the U.S. administration, which remains the country's second-largest trading partner. Even so, the trend points toward an ongoing contraction in bilateral trade with the U.S., which has already dropped 13% this year (external link).
Nonetheless, it is also compelling to focus on increasingly diversifying Brazil's trade agreements. New Mercosur agreements with the European Union and EFTA (European Free Trade Association) have already been announced. Others still need to make further progress, such as those between Mercosur and Japan, and with Canada. As the geopolitical rivalry between China and the United States intensifies and the U.S. seeks to bolster its influence and control over Latin America, this diversification will be of paramount importance to bolstering the resilience of the national Economy (external link).
This article, “As novas tarifas de Trump sobre o Brasil e a reafirmação da influência americana na América Latina”, by Fernanda Brandão, was originally published in The Conversation (https://theconversation.com/as-novas-tarifas-de-trump-sobre-o-brasil-e-a-reafirmacao-da-influencia-americana-na-america-latina-287847 (external link)) and is licensed under Creative Commons (CC BY-ND 4.0).