The US will impose a 25% tariff on imports from Brazil starting July 22, the White House confirmed on July 15, concluding a year-long trade investigation while carving out exemptions for meat, coffee, orange juice, energy products and aircraft parts.

President Donald Trump accepted a recommendation from the Office of the US Trade Representative (USTR) to levy the tariff following a Section 301 investigation launched in July last year, which examined Brazil's homegrown instant payment system Pix, illegal deforestation, restricted access to the ethanol market, weak intellectual property enforcement and what Washington called insufficient anti-corruption measures, O Globo reported.

A senior White House official, speaking to journalists on condition that the details are not released until the measure is formally published, said the exemption list was designed to protect products where the US has "low domestic supply" or where substitutes were hard to source, given the risk of higher costs and disrupted supply chains for US industry, Folha de S. Paulo reported.

"Regarding the beef issue, I would say that, for now, we are leaving this supply chain as it is. The US cattle herd is the smallest it has been in 75 years," the official said, adding that ranchers were working to rebuild their stock.

Around 2,100 items were ultimately exempted, according to the USTR, including pig iron, unflavoured instant coffee, organic honey, aluminium hydroxide, scrap iron and steel, some seafood and hides, certain wood products, medicines and pharmaceutical supplies, antiques and used clothing, Valor reported.

Goods already in transit to the US will also escape the surcharge.

Exemption requests from sectors including agricultural and industrial machinery, apparel, footwear, electrical equipment, gardening tools, paper and organic sugar were rejected, with the USTR concluding such goods could be sourced elsewhere or that the economic fallout did not justify sparing them.

High-purity cellulose was dropped from an earlier exemptions draft after reports linked Brazilian suppliers of the raw material to illegal deforestation, while a planned carve-out for certain chemical products was narrowed to cover pharmaceutical use only.

On Pix, the official said Washington was not seeking its removal but wanted a level playing field.

"What we don't want is a situation where US companies are forced to advertise Pix or are restricted by Pix, and Pix receives special treatment. We want Pix to compete with US companies on the same local basis," the official said, adding that Brazil's central bank acts as both regulator and operator of the system.

The official also cited Transparency International's Corruption Perceptions Index, on which Brazil scored 35 out of 100, and said Brazilian courts had taken measures against digital companies, though no specifics were given.

The official denied any meeting had taken place with right-wing presidential candidate Flávio Bolsonaro, who attended a public hearing tied to the case, and said Section 301 would not be used for political ends. Bolsonaro will face Lula, who is seeking a fourth nonconsecutive term, in the high-stakes October presidential election.

US Trade Representative Jamieson Greer, speaking separately at an event in Aspen, said the measures targeted global "structural excess industrial capacity." He warned that further hearings and action remained possible: "We will simply take measures to control our borders."

“Let there be no confusion about why: President Lula and his government have not negotiated with the US in good faith. His economic policies are bad for Americans and bad for Brazilians. For the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that," Secretary of State Marco Rubio wrote in an X post.

Brazil's cabinet hit back on July 16, saying it would reserve the right to invoke its Reciprocity Law.

“The Brazilian government repudiates the decision announced today by the United States government regarding the imposition of 25% tariffs on Brazilian products,” President Luiz Inácio Lula da Silva said in a statement on X, denying it had engaged in unfair trade practices and blaming the Bolsonaro family for the tariff escalation.

In the statement, Lula also said his government rejected the legitimacy of the US investigations "not grounded in multilateral trade rules," noting that 76% of US imports entered Brazil duty-free in 2025 and that the average effective tariff on US goods was just 3.1%.

"Despite this, we have never left the negotiating table to defend national interests," he added.

The Brazilian industry has already registered losses from earlier US tariffs imposed since 2025, with exports to the US market down 13%, or $2.6bn, driven by an 8.7% fall in industrial goods sales including semi-finished steel, pig iron and petroleum products, according to the Confederação Nacional da Indústria (CNI).

Its president, Ricardo Alban, said the impact was worsening: "We cannot spare efforts to reverse this logic and restore the relationship that Brazil and the US have built."

The Federation of Industries of the State of Minas Gerais (FIEMG) also voiced alarm, warning of supplier substitution and pressure on prices.

Verônica Winter, the federation's international business coordinator, said clarity was needed "on the products affected, the timeline for implementation and the treatment of contracts already under way," Valor reported.

Should Brazil retaliate, the White House official warned Washington "would frankly be forced to potentially modify our actions," though negotiations remained open ahead of the measure taking effect next week.