USTR Section 301 action on Brazil: 25% tariffs proposed

Executive summary

Key findings by USTR

Digital trade and electronic payment services
USTR determined that Brazil’s practices related to digital trade and electronic payment services are actionable. The agency cited Brazilian court orders directing U.S. social media companies to remove certain political content, suspend profiles, and refrain from disclosing orders to affected users. USTR also cited penalties for non-compliance, including fines, restrictions on access to assets and payment processing systems, and, in at least one case, the shutdown of a platform in Brazil.
USTR also found that Brazil has unfairly advantaged Pix, Brazil’s instant payment system operated by the Central Bank of Brazil. According to USTR, the central bank’s dual role as regulator and owner/operator of Pix creates a conflict of interest and results in preferential treatment, including mandatory participation and display requirements for certain financial institutions and fee rules that favor Pix over competing payment services.
Preferential tariffs for Mexico and India
USTR found that Brazil’s preferential trade arrangements with Mexico and India disadvantage U.S. exporters in sectors where the United States is also globally competitive. The arrangements provide lower tariff treatment to hundreds of Mexican and Indian goods across sectors including agricultural products, motor vehicles and parts, minerals, chemicals, and machinery, disadvantaging competing U.S. exports.
Anti-corruption enforcement
USTR determined that Brazil has failed to combat bribery and corruption. USTR concluded that insufficient enforcement disadvantages U.S. companies, which remain subject to significant anti-corruption compliance obligations and potential liability when competing for trade and investment opportunities in Brazil.
Intellectual property protection
USTR found that Brazil’s intellectual property protection and enforcement remain inadequate. The cited concerns include insufficient criminal and customs enforcement against counterfeit goods, lack of deterrent penalties, insufficient customs resources, lengthy patent examination timelines—particularly for biopharmaceutical patents—and inconsistent anti-piracy enforcement.
USTR noted that Brazil has been on the USTR Special 301 Watch List since 2007 and concluded that the country’s failure to address counterfeiting, patent pendency, and piracy harms U.S. businesses and workers in innovation- and creativity-driven sectors.
Ethanol market access
USTR determined that Brazil has failed to provide reciprocal treatment for U.S. ethanol exports. According to the notice, Brazil suspended a 20% ethanol import tariff in 2010, while the United States later allowed certain ethanol-related measures to expire. USTR stated that bilateral ethanol trade increased until Brazil changed course in 2017 by instituting a duty-free tariff-rate quota, with imports above quota subject to a 20% tariff. Brazil’s ethanol tariff has been set at 18% since February 2023, according to USTR.
USTR reported that U.S. ethanol exports to Brazil declined significantly after Brazil reinstated tariffs, with 2025 exports totaling $96 million, down 87% from a 2018 peak of $761 million.
Illegal deforestation
USTR also determined that Brazil’s enforcement related to illegal deforestation is insufficient and that illegal deforestation contributes to unfair competition in agricultural and wood product markets. USTR concluded that insufficient enforcement of environmental laws can lower production costs for certain Brazilian agricultural and timber products, thereby disadvantaging U.S. producers and exporters.

Proposed trade action: 25% additional tariffs

Key dates

Practical considerations for importers and global trade teams

Map Brazilian-origin imports by HTSUS classification.
Determine which products may be subject to the proposed 25% additional duty and which fall within the proposed exclusions.
Review the annex carefully.
Because exclusions are tied to HTSUS provisions, confirm classifications and identify whether any exclusions apply.
Assess landed-cost exposure.
Model the financial impact of a 25% additional duty, including effects on customs bonds, pricing, contracts, and inventory strategy.
Evaluate supply-chain alternatives.
For products not excluded, companies may need to assess non-Brazilian sourcing options.
Consider submitting comments.
USTR specifically requested comments on the scope of tariff coverage, whether products are necessary raw materials, whether alternative sources exist at reasonable prices or in sufficient quantities, and whether tariffs would cause serious supply disruptions.
Monitor implementation timing.
The proposal is not yet final. However, given the statutory deadline and scheduled hearing, companies should prepare for a potentially short implementation window if USTR finalizes the action.