The United States has fired yet another shot in its escalating trade war with Brazil. First, it slapped a BIG new tariff on Brazilian products. On July 10, 2025, President Donald Trump announced a staggering 50% tariff on products from Brazil, escalating tensions between the two nations. This announcement comes on the heels of a prior 10% tariff slapped on Canadian lumber in April. This constitutes a major turnaround in the agricultural/trade relations between the US and Brazil.
The new tariff will have deep, lasting impacts on American consumers. Brazil is thus a major source of agricultural imports to the US, including coffee, orange juice, beef and steel. With each rate hike, consumers are going to start seeing those price increases. Americans have gotten accustomed to buying goods on the cheap. Those prices will shoot up tremendously.
With this tariff, Brazil will suffer the highest USA tariff rate in the world — at least as of today. This key move is not only an economic development play. In doing so, it has become a stalking horse political ploy to pressure Brazilian authorities to end the current legal proceedings against former President Jair Bolsonaro. Bolsonaro is now on trial for his attempted 2022 coup that was a response to his loss in that election.
Brazilian President Luiz Inacio Lula da Silva has shown a zero tolerance approach to the tariffs. He forthrightly declares that Trump’s threats will not deter him. In this context, Lula has made a radical and explicit move by putting on a blue cap. The cap prominently bears the slogan, “O Brasil é dos brasileiros,” or “Brazil is for Brazilians.” This proclamation represents, beyond nationalistic pride, a resistance to what are seen as foreign threats.
The tariff decision seems to be affected by recent sanctions that the US imposed on Alexandre de Moraes. He is a Justice on the Brazilian Supreme Court. The sanctions feature a visa prohibition against Moraes and his immediate family. This move does nothing to improve the already strained diplomatic ties between the two countries. The White House has characterized this situation as one of “politically motivated persecution, intimidation, harassment, censorship and prosecution,” referring to the legal troubles surrounding Bolsonaro.
Brazilian producers and exporters are getting ready for the coming tariffs. At the same time, groups such as Cecafé, the Brazilian coffee exporters council, are raising alarm over the dramatic impacts on their sector. The council specifically cautions that the new tariffs will particularly adversely affect Brazilian roasters and exporters. These companies would not exist without their access to the US market.
The US also basks in a multimillion-dollar trade surplus with Brazil. To top that off, it exports massively more to Brazil than it imports. The US is highly reliant on Brazil for its agricultural exports. It imports about a third of its coffee and more than half of its orange juice from this South American nation. With these tariffs on the verge of rolling out, it’s further unclear what both countries should expect as a result of this growing and damaging trade war.