By Luciana Magalhaes <\/p>\n
SAO PAULO, July 22 (Reuters) – A new 25% U.S. tariff will hit a range of Brazilian goods on Wednesday, including farm machinery, wood products, ethanol and apparel, escalating tensions in an already strained relationship between the two most populous countries in the Western Hemisphere. <\/p>\n
The \u200ctariff is the first levied under the Trump administration’s new strategy of using the Trade Act of 1974 to investigate what it considers unfair \u200ctrade practices. The White House’s blanket assertion of emergency powers to levy high tariffs against most global partners was struck down by the U.S. Supreme Court earlier this year. <\/p>\n
The new tariff threatens between $7 billion \u200band $11 billion of Brazilian exports to the U.S., according to estimates from Brazil’s government and National Confederation of Industry (CNI), respectively. That amounts to roughly 18% to 26% of Brazil’s exports to the U.S. <\/p>\n
To soften the domestic effect of the tariffs, the U.S. exempted several key imports, including beef, coffee, aircraft and plane parts. <\/p>\n
Brazil is the first country hit with a tariff after a year-long Section 301 investigation into unfair trade practices, even though the U.S. has consistently had a trade surplus with Brazil. <\/p>\n
“This is the irony of \u200cthe U.S. measures,” said Welber Barral, a former Brazilian foreign \u2060trade secretary, noting the bilateral trade balance. <\/p>\n
Washington has argued tariffs are necessary to counter what it calls unfair trade practices, from electronic payment services to ethanol market access and illegal deforestation. <\/p>\n
The tariffs take effect just two days before a temporary 10% global \u2060tariff expires and after a Supreme Court ruling struck down previous 50% U.S. duties on Brazilian goods that forced exporters to seek new markets. <\/p>\n
FOOTWEAR LAYOFFS <\/p>\n
For many sectors, the adjustments have already been painful. <\/p>\n
Brazil’s footwear industry, which counts the U.S. as its top foreign market, has already downgraded its export outlook for the year to an expected 7.1% drop, compared with its \u200bprevious \u200bforecast for a 3.6% drop. <\/p>\n
The U.S. buys one in every five shoes exported from Brazil, according \u200bto the Brazilian Footwear Industries Association (Abical\u00e7ados). <\/p>\n
“There is no other market \u200ccapable of replacing the U.S.,” said Toni Hajel, owner of exporter TH Shoes and head of the footwear industry union in Franca, a key hub for footwear production in Sao Paulo state. <\/p>\n
He said about 40% of the area’s exports, or 650,000 pairs a year, are sold to the U.S. The new tariffs will make those sales unviable, he added, forcing producers to lay off workers unless Brazil renegotiates the duties or secures a footwear exemption. <\/p>\n
LONG-TERM CONSEQUENCES <\/p>\n
Economists warn that the uncertainty created by successive measures and partial exemptions may have consequences well beyond immediate trade losses. <\/p>\n
“It undermines confidence,” said Gustavo Pessoa, an economics professor at the Funda\u00e7\u00e3o Getulio Vargas university in S\u00e3o Paulo, \u200cwho traveled to Washington this month to argue against the tariffs at a public hearing. <\/p>\n
Pessoa said \u200bthe tariffs would hinder long-term trade relations on both sides: U.S. buyers may fear more Brazilian \u200bproducts will be targeted, while Brazilian exporters may not invest in supply \u200bchains geared toward the U.S. market. <\/p>\n
U.S. tariffs have already hurt bilateral trade, CNI data show, with Brazilian exports to the U.S. down $2.6 \u200cbillion, or 13% in the first half of this year from \u200bthe same period of 2025, driven largely \u200bby declines in industrial goods such as iron and steel products, petroleum oils and woodpulp. <\/p>\n
Brazil is also part of a separate U.S. investigation into forced labor allegations that ends on July 24, which could add another 12.5% tariff, potentially pushing total duties on some goods to 37.5%. <\/p>\n
The outstanding probe has \u200bleft Brazilian officials in limbo, with Brazilian Trade Minister Marcio \u200cElias Rosa recently saying he had no idea how the penalty will be implemented, even though he expects it to be confirmed. <\/p>\n
“We will \u200bfind out if it will be cumulative or not, whether we will have 25% plus 12.5% or if we will get an exemption,” \u200bhe told reporters in Brasilia. <\/p>\n
(Reporting by Luciana MagalhaesEditing by Brad Haynes and David Gaffen) <\/p>\n","protected":false},"excerpt":{"rendered":"By Luciana Magalhaes SAO PAULO, July 22 (Reuters) – A new 25% U.S. tariff will hit a range…\n","protected":false},"author":2,"featured_media":778551,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[941,28,101,10501,327709],"class_list":["post-778550","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-brazil","tag-business","tag-economy","tag-u-s-supreme-court","tag-unfair-trade-practices"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/778550","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=778550"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/778550\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/778551"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=778550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=778550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=778550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}