50% Tariff on Brazil Begins Aug. 6; Major Carve-Outs Apply
President Donald Trump, invoking the International Emergency Economic Powers Act, is imposing an additional 40% duty on some imports from Brazil, bringing the total tariff rate to 50%.
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The initial 10% imposed under IEEPA was the rate for all countries that buy more U.S. goods than they export to the U.S.; the executive order issued July 30 says the rate must be hiked because "recent policies, practices, and actions of the Government of Brazil threaten the national security, foreign policy, and economy of the United States."
It continues, "Members of the Government of Brazil have taken actions that interfere with the economy of the United States, infringe the free expression rights of United States persons, violate human rights, and undermine the interest the United States has in protecting its citizens and companies. Members of the Government of Brazil are also politically persecuting a former President of Brazil, which is contributing to the deliberate breakdown in the rule of law in Brazil, to politically motivated intimidation in that country, and to human rights abuses."
The new duties won't apply to goods that are loaded before 12:01 a.m. EDT Aug. 6 and are in transit when the action begins, as long as they enter before 12:01 a.m. EDT Oct. 5.
There also are hundreds of items that won't be subject to the additional 40%, including aircraft and aircraft parts, orange juice, Brazil nuts, iron ore, pig iron, oil products, and items subject to the Section 232 actions on steel, aluminum, copper, lumber, autos, and semiconductors. The lists are in the annexes to the order.
In the order itself, the president writes that items that are excluded from the 40% include "certain silicon metal, pig iron, civil aircraft and parts and components thereof, metallurgical grade alumina, tin ore, wood pulp, precious metals, energy and energy products, and fertilizers."
The top exports from Brazil are oil products, iron and steel, aircraft, machinery, coffee, wood pulp and wood.
The order says if Brazil retaliates with higher tariffs on U.S. goods, the rate will go up by the corresponding amount.
The order elaborates on how Brazil has interfered with the economy by describing how Brazil censored social media posters, and coerced the companies hosting those posters to prevent them from speaking, by threatening "extraordinary fines" or "complete exclusion from the Brazilian market."
It also describes unjustified criminal charges against former President Jair Bolsonaro. Similar to when Trump's supporters stormed the Capitol on Jan. 6, 2021, because they believed Trump's electoral loss was the result of cheating, Bolsonaro's supporters stormed Brazil's legislature after he lost. That uprising is the source of Bolsonaro's case.
The executive order said that Brazil's actions "are repugnant to the moral and political values of democratic and free societies and conflict with the policy of the United States to promote democratic governments throughout the world, the principle of free expression and free and fair elections, the rule of law, and respect for human rights."
Sen. Tim Kaine, D-Va., after the order was issued, told an International Trade Today reporter, "I don't think Brazil's decision to do an internal prosecution of a Brazilian president is an emergency within the meaning [of the statute]," and so he will challenge the emergency in the Senate. IEEPA allows Congress to terminate an emergency. "The vote will happen when we get back from recess, but yeah, I'm going to file it as soon as I can."