The $41 Billion Brazil Tariff: How to Navigate 1,600 Exemptions Before July 1

USTR just proposed slapping 25% tariffs on nearly everything imported from Brazil — your 11th-largest source of goods. But buried in the Federal Register notice are 1,600+ HTSUS subheadings that would be exempt, including 430 lines for civil aircraft. If you import crude petroleum, coffee, iron, beef, or aircraft parts from Brazil, you have until July 1 to file comments and until July 15 to prepare for impact.

On June 1, 2026, the Office of the United States Trade Representative dropped a Federal Register notice that should have every importer sourcing from Brazil reaching for their tariff schedules. The proposed action: a blanket 25% Section 301 tariff on all goods originating in Brazil — unless your product falls into one of roughly 1,600 exempted HTSUS subheadings.

The United States imported $41.6 billion worth of Brazilian goods in 2025. In April 2026 alone, the top Brazilian exports to the U.S. included $254 million in crude petroleum, $234 million in semi-finished iron, and $200 million in frozen bovine meat. Coffee, aircraft, ethanol, wood pulp, and sugar round out the list. If you're in any of those supply chains, this isn't a theoretical exercise — it's a line-item cost increase hitting your margins within weeks.

And unlike the IEEPA tariffs or Section 232 metals duties, this action came through the full Section 301 procedural process: a year-long investigation, 295+ written comments, a public hearing in September 2025, and bilateral consultations with Brazil in April 2026. That procedural rigor makes these tariffs harder to challenge in court — and more likely to stick.

Why Brazil, Why Now?

USTR initiated this investigation on July 15, 2025, at the President's direction. After a year of digging, the agency found Brazil's trade practices "unreasonable or discriminatory" across six distinct areas:

1. Digital trade and electronic payment services — restrictions on cross-border data flows and barriers to U.S. fintech companies operating in Brazil
2. Unfair, preferential tariffs — Brazil applies higher tariff rates on U.S. goods than on competing imports from other countries
3. Anti-corruption enforcement — inadequate enforcement that disadvantages U.S. companies competing for contracts
4. Intellectual property protection — insufficient patent and trademark protections affecting U.S. rights holders
5. Ethanol market access — Brazil maintains barriers that limit U.S. ethanol exports despite being one of the world's largest ethanol markets
6. Illegal deforestation — trade in goods produced through deforestation that undercuts U.S. producers meeting environmental standards

This isn't a single-issue dispute. USTR found actionable practices in all six areas simultaneously, which gives the agency broad justification for the proposed remedy and makes a quick bilateral resolution less likely.

The Tariff Structure: What's Covered, What's Not

Here's the critical detail most importers miss: the proposed 25% tariff applies to everything from Brazil by default — unless your product is specifically listed in the Annex of exempt subheadings.

Covered (25% additional duty):

• All Brazilian-origin goods not listed in the exemption Annex
• Applies on top of existing MFN duty rates
• No de minimis threshold mentioned

Exempt (no additional Section 301 duty):

• 1,600+ HTSUS subheadings listed in the Annex
• Approximately 430 of those lines apply specifically to civil aircraft uses
• Articles already subject to Section 232 tariffs (steel, aluminum, copper, and certain heavy equipment)

The Section 232 exclusion makes sense — you can't stack two presidential tariff actions on the same goods without creating administrative chaos. But it means Brazilian steel and aluminum importers aren't getting relief; they're just staying under the existing 25% Section 232 rate.

Key Product Categories at Risk

Based on the 2025 trade data and the known exemption structure, here's how the major Brazilian import categories likely shake out:

The aircraft carve-out is massive. With 430 HTSUS lines dedicated to civil aircraft uses, it's clear USTR wanted to protect the aerospace supply chain — think Embraer regional jets and components that U.S. carriers depend on. If you're importing Brazilian aircraft parts, you're probably safe. If you're importing Brazilian coffee or beef, you need to check the Annex line by line.

The Comment Process: What You Can Actually Do

The public comment period closes July 1, 2026 at 11:59 PM EDT. That's five days from today. Here's what you need to know about participating:

Who should comment:

• Any importer sourcing products from Brazil that aren't clearly in the exemption Annex
• Trade associations representing affected industries
• Companies that want specific HTSUS lines added to the exemption list
• Downstream consumers who would face price increases

How to comment:

• Submit through the Federal eRulemaking Portal under docket number USTR-2026-0331
• No account required — but you do need to follow USTR's formatting guidelines
• Include your company name, the specific HTSUS codes you're concerned about, and the economic impact

What makes an effective comment:

• Quantify the harm: "This tariff would add $X million annually to our import costs"
• Explain supply chain dependency: "No domestic alternative exists for [product]"
• Identify downstream effects: "Price increases would be passed to [end consumers]"
• Reference specific HTSUS subheadings — vague comments get ignored

Public hearing: July 6, 2026 at the U.S. International Trade Commission in Washington, D.C. Requests to testify closed June 22, but you can still attend as an observer.

The July 15 Deadline: What Happens Next

Under Section 301's statutory framework, USTR must take "responsive action" within 30 days of the determination. Since the determination was published June 1, that gives USTR until July 15, 2026 to announce final tariff rates and implementation details.

Here's the likely timeline:

The compressed timeline between the comment deadline (July 1) and the statutory action deadline (July 15) means USTR has only 14 days to review comments and finalize the action. That's unusually tight — and it suggests the proposed 25% rate and exemption list may not change dramatically in the final rule.

How This Stacks with Your Existing Duties

If you're importing from Brazil, you already pay MFN duty rates. The proposed Section 301 tariff would add 25% on top of whatever you're already paying. Here's what that looks like for common Brazilian imports:

For products currently entering at 0% MFN — like coffee and wood pulp — this represents an infinite percentage increase in duty costs. That's not hyperbole; it's math.

Five Things to Do Before July 1

1. Pull your entry data — Run a report on all entries from Brazil over the last 12 months. Identify every HTSUS subheading you've used. Cross-reference against the exemption Annex in the Federal Register notice (docket USTR-2026-0331).

2. Quantify your exposure — For every non-exempt subheading, calculate what a 25% additional duty means in dollar terms. This number goes in your public comment and your CFO's inbox.

3. File a public comment — Even if you think the tariff is inevitable, comments create a record. If USTR later considers product-specific exclusions (as they did with China Section 301 tariffs), your comment establishes standing. The deadline is July 1 at 11:59 PM EDT.

4. Evaluate sourcing alternatives — For high-volume, non-exempt products, start identifying alternative suppliers. Coffee from Colombia or Ethiopia. Beef from Australia or Uruguay. Wood pulp from Canada or Scandinavia. Don't wait for the final rule.

5. Review your classification accuracy — A product correctly classified under an exempt subheading pays 0% Section 301 duty. A product misclassified into a covered subheading pays 25%. The difference between HTS subheadings has never been worth more. If you haven't audited your Brazilian import classifications recently, now is the time.

What the China Section 301 Playbook Tells Us

We've seen this movie before. When USTR imposed Section 301 tariffs on China starting in 2018, the initial lists were broad, the exclusion process was bureaucratic, and companies that filed early fared better than those that waited.

Key lessons from the China experience:

• Exclusion processes came later — USTR eventually created a product-specific exclusion process for China tariffs. If that happens for Brazil, your July 1 comment establishes your case early.
• Classification became a competitive advantage — Companies that invested in accurate HTS classification found legitimate ways to shift products into excluded subheadings. This isn't tariff evasion — it's knowing your products.
• Supply chains adapted, but slowly — It took 12-18 months for most importers to meaningfully diversify away from China. Brazil sourcing shifts will follow a similar timeline.
• Retroactive relief is rare — Don't assume you'll get refunds if tariffs are later reduced. The IEEPA CAPE refund process has been an exception, not the rule.

The Bigger Picture: Section 301 Is Back

The Brazil action is the third major Section 301 action in 2026, following the forced labor tariffs on 60 countries and the IP investigation into Vietnam. USTR is clearly using Section 301 as its primary tool for bilateral trade pressure — and unlike IEEPA tariffs, Section 301 actions have survived court challenges more consistently.

For importers, this means country-specific tariff risk is no longer limited to China. Any trading partner with unresolved trade disputes — and that's most of them — could face a Section 301 investigation. Your compliance program needs to monitor USTR's investigation docket the same way you monitor Federal Register notices.

The Bottom Line

The Brazil Section 301 tariff is real, it's moving fast, and the exemption structure is complex enough that getting your classification right is worth thousands — or millions — in duty savings. You have five days to comment and roughly six weeks to prepare.

TariffLens tracks all 1,600+ exempt HTSUS subheadings and can cross-reference your import history against the proposed Brazil tariff in minutes. If you're sourcing from Brazil, now is the time to know exactly where you stand.

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.