US proposes 25% tariffs on Brazilian imports over illegal deforestation and trade practices

The US Trade Representative has proposed 25% tariffs on Brazilian imports after concluding that a range of Brazilian policies and practices are actionable under Section 301 of the Trade Act of 1974, with illegal deforestation now placed alongside wider complaints over trade barriers, corruption enforcement, intellectual property and digital commerce.

According to the USTR’s notice, the levy would apply broadly to Brazilian goods, although a set of exclusions would shield cert...

ain items, including products already covered by Section 232 tariffs and other goods listed in the annex. The proposal also makes room for items that are not produced in sufficient quantities in the United States, materials whose taxation could trigger supply shortages, and products that could create wider economic disruption.

The decision follows an investigation launched in 2025 into Brazil’s trade practices. In its determination, the USTR said several acts, policies and practices were unreasonable and burdened US commerce. Those concerns included digital trade and electronic payment services, preferential tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access and illegal deforestation.

The deforestation element is likely to be particularly sensitive. The USTR argues that illegal logging and associated timber laundering can give unfair cost advantages to agricultural and timber exporters, depressing prices for legally sourced wood and distorting competition. The agency also said documentation alone may not be enough to prove the lawful origin of timber harvested in the Amazon, pointing to weaknesses in auditing and verification within Brazil’s forest registration system.

Brazil’s forestry and furniture sectors are among those potentially exposed, alongside agricultural exporters. The proposal also comes at a politically charged moment in bilateral relations. The Associated Press reported that President Luiz Inácio Lula da Silva has denounced the move as politically motivated and warned of retaliation, while Washington has already moved to designate two Brazilian gangs as terrorist organisations, sharpening tensions further.

Trade figures suggest the dispute is unfolding despite an uneven commercial relationship. The Associated Press said the United States ran a substantial surplus with Brazil in 2024, including more than $14 billion in goods and $29.6 billion in services. Lula has indicated that Brazil could redirect more trade towards other partners, including China, which remains its largest trading partner.

The tariff plan is not yet final. A public comment period opened on 1 June 2026, requests to speak at a hearing are due by 22 June, written submissions must be filed by 1 July, and a public hearing is scheduled for 6 July in Washington. The USTR said it will review the submissions before deciding whether to proceed.

The legal backdrop is also important. After the Supreme Court ruled in February 2026 that President Donald Trump had exceeded his authority by using emergency powers to impose broad tariffs, the administration has turned more heavily to Section 301, which has historically proved more durable in court. That makes the Brazil case not just a bilateral dispute, but a possible template for future trade actions.

Source: Noah Wire Services