Trump targets Brazil with 25% tariff, accuses Lula government of unfair trade practices

The United States has announced plans to impose a 25 per cent tariff on certain imports from Brazil, escalating trade tensions between Washington and Brasilia as President Donald Trump’s administration expands its tariff push.

US Trade Representative Jamieson Greer said late on Wednesday that the tariff action would be taken under Section 301 of the Trade Act after a year-long investigation concluded that Brazilian policies on digital trade, tariffs, intellectual property, ethanol access and deforestation were placing an unfair burden on US commerce.

The United States Trade Representative (USTR) said the move was necessary to address what it described as unfair trade practices and ensure American businesses and workers could compete on a level playing field.

“Today's action is necessary to address these unfair trade practices to ensure American workers and companies can compete on a level playing field,” Greer said.

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“Extensive negotiations with Brazil over the past year have not resolved these issues,” he added, while saying Washington remained open to further talks.

Brazil is the first country to be targeted under Trump’s new tariff strategy, which relies on Section 301 of US trade law to investigate and respond to alleged unfair practices by foreign governments.

Lula rejects US tariff move, calls it ‘lamentable milestone’

Brazilian President Luiz Inacio Lula da Silva strongly criticised the US decision, calling the tariff announcement a setback in bilateral relations and rejecting Washington’s allegations of unfair trade practices.

“July 15, 2026, will go down in the history of relations between Brazil and the United States as a lamentable milestone,” Lula said in a statement posted on social media.

“The Brazilian government repudiates the decision announced today by the US government regarding the imposition of 25 per cent tariffs on Brazilian products, based on Section 301 of the Trade Act of 1974,” he added.

Lula said there was “no justification” for unilateral measures against Brazil and argued that US trade data showed Washington had maintained a large surplus with Brasilia.

According to Lula, the United States accumulated a surplus of $424.5 billion in goods and services trade with Brazil over the past 15 years. He also said that in 2025, around 76 per cent of US-origin imports entered Brazil without paying import duties, with the average effective tariff rate on American products at 3.1 per cent.

Brazil, he said, did not recognise the legitimacy of investigations that were not aligned with multilateral trade rules but had continued negotiations to defend its interests.

Brazil disputes US allegations

Lula rejected US concerns over Brazil’s digital regulations, including the country’s instant payment system PIX, as well as accusations linked to environmental policies and deforestation.

“We have demonstrated that the allegations against PIX and the regulation of digital platforms are unfounded, and the accusations regarding deforestation are absurd,” Lula said.

He described PIX as a “heritage of our people” and said Brazil would continue regulating digital platforms while protecting national interests.

On environmental issues, Lula said Brazil had taken strong action against illegal environmental activities and had significantly reduced deforestation across its biomes since 2023.

The Brazilian president also said most participants in recent public hearings organised by the USTR opposed the tariff increase.

“63 of the 78 interventions made by representatives of the Brazilian and US private sectors were against the tariff hike,” he said.

Rubio accuses Lula of bad-faith negotiations

US Secretary of State Marco Rubio defended the tariff decision, accusing Lula’s government of failing to negotiate with Washington in good faith.

“Today, President Trump directed USTR to impose a 25 per cent tariff on most Brazilian imports. Let there be no confusion about why: President Lula and his government have not negotiated with the US in good faith,” Rubio said in a post on X.

“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,” he added.

The comments mark a sharp escalation in rhetoric between the two governments, which have clashed over trade, technology regulation and environmental policies.

Brazil threatens response through WTO, trade measures

Lula said Brazil would take steps to limit the economic impact of the tariffs and protect affected industries.

The Brazilian government plans to activate measures under its Reciprocity Law, which allows it to respond to trade restrictions imposed by other countries. It also said it would restart proceedings under the World Trade Organization’s dispute settlement mechanism.

“Brazil will immediately initiate the procedures to activate the instruments provided for in the Reciprocity Law,” Lula said.

He added that Brazil would continue diversifying its trade partnerships and opening new markets, citing recent agreements involving Mercosur with the European Union, the European Free Trade Association and Singapore.

The Brazilian government also said its “Sovereign Brazil Plan” would support industries affected by what it called “illegal and arbitrarily imposed tariffs”.

New front in Trump’s tariff campaign

The tariff action marks a new front in Trump’s broader trade agenda, which uses import duties as a tool to pressure foreign governments and protect US industries.

The administration has argued that tariffs are needed to address trade imbalances and policies that disadvantage American companies.

Brazil and the US have deep economic ties, with trade spanning agriculture, energy, aircraft, metals, manufacturing and technology. Brazil is a major exporter of commodities and industrial goods to the US market.

The impact of the tariff will depend on the final list of products covered by the measure.

The dispute also adds uncertainty for Brazilian exporters and businesses that rely on access to the US market, while raising the prospect of a wider trade confrontation between two of the Western Hemisphere’s largest economies.