On June 1, 2026, USTR dropped a Federal Register notice that could reshape your Brazil supply chain overnight: a proposed 25% Section 301 tariff on nearly all Brazilian goods. But with 1,600+ HTS exemptions, two major carve-outs, and a 30-day comment window, your next move matters more than the headline. Here's what you need to know — and do — right now.
Late on a Sunday evening — because trade policy announcements apparently love ruining weekends — the Office of the United States Trade Representative published one of the most sweeping Section 301 determinations in recent memory. The target: Brazil, America's ninth-largest trading partner and the source of $38.1 billion in imports last year.
The proposed remedy: an additional 25% ad valorem tariff on essentially everything Brazilian entering the United States.
But here's what most headlines are missing: the exemption list is massive. Over 1,600 HTSUS subheadings are carved out, including roughly 430 lines dedicated to civil aircraft uses alone. If you import from Brazil, the question isn't whether you're affected — it's whether your specific products fall inside or outside those exemptions. And you have until July 1 to tell USTR why they should care.
The Investigation: A Year in the Making
This didn't come out of nowhere. President Trump directed USTR to initiate the Section 301 investigation on July 15, 2025 — exactly one year before the statutory deadline for action. The investigation examined whether certain Brazilian government acts, policies, and practices are "unreasonable or discriminatory and burden or restrict U.S. commerce" under Sections 301(b) and 304(a) of the Trade Act of 1974.
The process was thorough by Section 301 standards:
- July 15, 2025: Investigation initiated
- September 3, 2025: Public hearing held; 295+ written comments and rebuttal comments received
- April 15-16, 2026: Formal consultations with the Government of Brazil
- June 1, 2026: Actionability determination and proposed tariff published
After reviewing the entire record, USTR concluded that Brazil's practices across six distinct areas are actionable. The determination sets the stage for what could be the most significant new country-specific tariff action since the China Section 301 tariffs first landed in 2018.
The Six Issue Areas: Why Brazil, Why Now
USTR's determination doesn't target a single trade irritant — it covers six areas that collectively paint a picture of systemic barriers to American commerce. Understanding them matters because they'll determine whether Brazil can negotiate its way out before July 15.
1. Digital Trade and Electronic Payment Services
This is the headline grievance. USTR identified two core problems. First, Brazilian courts have issued secret take-down orders to U.S. social media companies — sometimes with global reach — accompanied by daily non-compliance fines and asset-freeze orders. Meta's transparency reports show Brazil ordered the restriction of approximately 9,800 content items between July and December 2025 alone.
Second, Brazil's central bank operates the Pix instant payment system while simultaneously regulating its competitors. USTR found that mandates and fee caps created in this dual role disadvantage U.S. electronic payment service providers.
2. Unfair, Preferential Tariffs
Brazil maintains tariff structures that USTR considers discriminatory toward American goods, giving preferential access to competitors.
3. Anti-Corruption Enforcement
USTR flagged enforcement practices that create an uneven playing field for U.S. companies operating in or exporting to Brazil.
4. Intellectual Property Protection
Gaps in IP enforcement — particularly around patent protection and trade secrets — that burden American businesses.
5. Ethanol Market Access
Brazil restricts U.S. ethanol imports despite being one of the world's largest ethanol markets. This has been a sore point in U.S.-Brazil trade relations for over a decade.
6. Illegal Deforestation
Perhaps the most unusual Section 301 issue area ever: USTR determined that Brazil's policies associated with illegal deforestation constitute actionable trade practices that burden U.S. commerce.
What Gets Hit: The 25% Tariff Scope
The proposed tariff is broad by design — it covers all goods of Brazil with specific carve-outs. This is the opposite approach from the China Section 301 tariffs, which started with targeted product lists. Here, USTR is starting with everything and subtracting.
The 25% additional duty would stack on top of existing tariffs, meaning many Brazilian goods could face combined duty rates of 30-50% or more depending on their MFN rate. And remember: Brazil is already subject to a separate 40% IEEPA tariff on many products (though agricultural items like beef and coffee were later exempted from that levy).
For importers doing the math, here's what stacking could look like:
| Product Category | MFN Rate (Typical) | IEEPA (40%) | Proposed 301 (25%) | Potential Total |
|---|---|---|---|---|
| Industrial machinery | 0-5% | 40% | 25% | 65-70% |
| Auto parts | 2.5-4% | 40% | 25% | 67.5-69% |
| Chemicals | 0-6.5% | 40% | 25% | 65-71.5% |
| Furniture | 0-5% | 40% | 25% | 65-70% |
| Plastics | 0-6.5% | 40% | 25% | 65-71.5% |
Note: These are illustrative — actual rates depend on specific HTS classification and whether IEEPA exemptions apply to your product.
What's Exempt: The 1,600+ HTS Carve-Outs
The exemption structure has two major components:
Carve-Out #1: Section 232 Products
All articles already subject to Section 232 tariffs are excluded from the proposed 301 tariff. This covers:
- Steel and steel derivative products
- Aluminum and aluminum derivative products
- Copper articles
- Certain heavy equipment
The logic is straightforward: these products already face their own penalty tariffs. Stacking Section 301 on top of Section 232 on top of IEEPA would create rates so extreme they'd effectively embargo the goods — which even this administration appears to want to avoid for critical industrial inputs.
Carve-Out #2: The 1,600+ HTS Annex
The Federal Register notice includes an Annex listing over 1,600 specific HTSUS subheadings that would be exempt. Key categories include:
- Civil aircraft parts and components (~430 HTS lines) — protecting the Embraer supply chain
- Beef and meat products — Brazil is a major U.S. beef supplier
- Coffee — Brazil supplies roughly 20% of U.S. coffee imports
- Rare earth metals and materials — supply chain security concerns
- Informational materials, donations, and accompanied baggage — standard statutory exclusions
The aircraft exemptions are particularly notable. Embraer, the Brazilian aerospace giant, supplies regional jets and components throughout the U.S. aviation industry. Tariffing those parts would ripple through American airline operations immediately.
The tariff exemptions reportedly cover approximately 42% of Brazil's total exports to the United States — meaning 58% of the $38.1 billion trade flow faces potential exposure.
The Forced Labor Overlay: A Second 301 Threat
Here's a detail that most coverage is missing: Brazil is also one of dozens of countries subject to a separate, ongoing Section 301 investigation into the alleged failure to impose and effectively enforce a ban on importing goods produced with forced labor.
This means Brazilian imports could theoretically face two separate Section 301 tariff actions in addition to existing IEEPA and Section 232 levies. If you're importing manufactured goods from Brazil that involve any supply chain opacity, this second investigation adds another layer of compliance risk.
Critical Deadlines: Your Action Window
The comment and hearing process creates a narrow but important window for importers to influence the outcome:
| Deadline | Date | Action Required |
|---|---|---|
| Written comments due | July 1, 2026 | Submit via docket USTR-2026-0331 |
| Hearing appearance requests | June 22, 2026 | File request + testimony summary |
| Public hearing | July 6, 2026 | USITC, Washington, D.C. |
| Statutory action deadline | July 15, 2026 | USTR must finalize determination |
That July 15 statutory deadline is hard. Under Section 304 of the Trade Act, USTR must take responsive action within 12 months of initiating the investigation. The clock started July 15, 2025. There's no extension mechanism — USTR acts by July 15 or the investigation's legal authority weakens significantly.
What to Do Right Now: Action Steps for Importers
1. Classify every Brazilian import against the exemption Annex — Pull your last 12 months of entry summaries for Brazilian-origin goods. Cross-reference every HTS code against the 1,600+ exempt subheadings in the Federal Register notice. Your broker should be doing this already — if they're not, call them today.
2. Calculate your exposure — For products NOT on the exemption list, model the cost impact of an additional 25% duty. Factor in existing IEEPA rates. Determine whether your landed cost still supports your margins or whether you need to renegotiate with suppliers or adjust pricing.
3. File comments by July 1 — If your product isn't on the exemption list but should be (critical supply chain input, no domestic alternative, national security relevance), the comment period is your chance. USTR explicitly invites comments on "the proposed action, including tariffs on articles of Brazil and certain exemptions." Use docket number USTR-2026-0331.
4. Consider requesting a hearing appearance — If your situation is compelling and you can articulate the harm clearly, request to testify at the July 6 hearing. Deadline for requests is June 22 — include a summary of your testimony.
5. Evaluate supply chain alternatives — Begin mapping alternative sourcing for your highest-volume, highest-exposure Brazilian imports. Even if the tariff is ultimately modified or reduced through negotiations, having alternatives identified puts you in a stronger negotiating position with existing Brazilian suppliers.
6. Monitor the Brazil negotiation channel — USTR indicated it will "continue engagement with the Government of Brazil in an effort to resolve outstanding issues" through July 15. A last-minute deal — or even partial resolution on specific issue areas — could narrow the tariff's scope. Stay close to your trade counsel.
What Comes Next: July 15 and Beyond
Three scenarios are realistic:
Scenario A — Full implementation. USTR finalizes the 25% tariff as proposed on July 15 with the current exemption list. This is the base case that importers should plan for.
Scenario B — Narrowed scope. Brazil makes concessions on one or two issue areas (most likely digital trade and ethanol), and USTR narrows the tariff to specific product categories tied to the remaining disputes. The 25% rate stays but applies to fewer goods.
Scenario C — Delayed implementation with conditions. USTR announces the determination but gives Brazil a 90-day compliance window before tariffs take effect — similar to the approach used in some earlier Section 301 actions. This buys time but doesn't eliminate the threat.
What's almost certainly NOT happening: a complete withdrawal. The investigation is too far along, the determination too comprehensive, and the political dynamics too favorable for the tariff to simply disappear.
The Bigger Picture: Brazil in the Tariff Crosshairs
Brazil now faces a remarkable stack of U.S. trade actions: a 40% IEEPA tariff on many goods, Section 232 tariffs on metals, and now a proposed 25% Section 301 tariff covering most remaining products. For an economy that sent $38.1 billion in goods to the U.S. in 2025 — with iron and steel ($5.42B), wood products ($1.29B), and meat ($1.29B) among the top categories — this represents a fundamental repricing of the bilateral trade relationship.
For importers, the operational reality is clear: your Brazil-sourced supply chain needs active management right now, not after July 15. Whether that means filing comments, requesting exemptions, reclassifying products to fall within exempt headings, or beginning the work of identifying alternative sources, the 30-day window between now and the comment deadline is when your options are widest.
TariffLens can help you cross-reference your Brazilian import portfolio against the 1,600+ exempt HTS subheadings and model your exposure — reach out if you need help making sense of what this means for your specific products.
This article is for informational purposes only and does not constitute legal, tax, or customs advice. Consult a licensed customs broker or trade attorney for guidance specific to your situation.