Starting July 22, 2026, the United States will add a 25% tax (called a tariff) on certain products imported from Brazil. A tariff is a fee a government charges on goods coming from another country, making those goods more expensive to buy. The US decided to do this after a year-long investigation found that Brazil had been playing by unfair trade rules, including not doing enough to fight corruption and charging its own unfair tariffs on American goods. Brazil's government says the US decision is wrong and has started a legal process to strike back.

President Luiz Inácio Lula da Silva's office posted a statement on X rejecting the tariffs and saying Brazil had done nothing wrong. Lula also blamed his political rival Flávio Bolsonaro, son of former president Jair Bolsonaro, saying politics — not fair trade — was behind the move. Flávio Bolsonaro recently visited Washington, and his father is an ally of Donald Trump.

US Trade Representative Jamieson Greer said the tariffs were needed "to ensure American workers and companies compete on a level playing field." Greer said the US had spent a year trying to negotiate with Brazil but the problems were not solved, though the US is still open to talking. Secretary of State Marco Rubio went further, saying Lula's government "have not negotiated with the US in good faith" and that Lula's economic policies are "bad for Americans and bad for Brazilians" (The Guardian).

The tariffs are being imposed under a US law called Section 301 of the Trade Act of 1974. This law lets the US government investigate and punish other countries for trade practices it considers unfair. Brazil is the first country targeted under the Trump administration's new tariff strategy using this law (Reuters). The investigation was ordered by President Trump and focused on Brazil's rules around digital trade and electronic payments. It included a public hearing in September 2025 and a follow-up hearing on July 6, 2026 (USTR). Latin American countries and some steel companies asked to be exempted from the tariffs at that hearing (Reuters).

Some products are exempt from the tariffs, meaning no extra tax will be charged on them. These include coffee, beef, oranges and orange juice, some oil and gas products, and airplane parts — things the US does not produce itself or that could cause problems if their supply was disrupted.

Brazil has activated what it calls a reciprocity law, which gives it a legal way to put its own tariffs on US goods in response (teleSUR English). In other words, Brazil is saying it will not just accept the US tariffs quietly.

There is also a separate US investigation into whether Brazil has connections to forced labor, and that investigation is due to finish on July 24, 2026 — just two days after the new tariffs take effect (Reuters). That investigation is part of a much bigger US effort involving 60 similar investigations into countries that fail to stop the trade of goods made with forced labor (USTR).

The relationship between the US and Brazil has been bumpy. Trump previously placed a 50% tariff on Brazil using a different law — one that gives the president emergency powers over economic matters — because he was upset about Brazil's prosecution of Jair Bolsonaro for trying to overturn his 2022 election loss. In February 2026, the US Supreme Court ruled against many of those earlier tariffs. Things seemed to improve in May 2026 when Lula visited the White House.

The switch from the emergency-powers law to Section 301 appears to be a response to that Supreme Court ruling. Section 301 requires a formal investigation and public hearings, which creates a paper trail that is harder to challenge in court. The year of investigation, the public hearings, and the formal determination all make this tariff action look very different from the earlier emergency approach.

What makes this especially complicated is that it is happening right before Brazil's October 2026 elections. Lula can use the US tariffs to rally Brazilians around him by pointing to a foreign adversary. At the same time, Bolsonaro's allies can argue that Lula has failed to manage the relationship with the US. And the forced-labor investigation finishing on July 24 means that even if the current trade dispute is settled, Brazil could face yet another set of trade restrictions almost immediately after these tariffs begin.