A 25 per cent additional tariff imposed by the United States on a broad range of Brazilian goods entered into force on Wednesday, affecting an estimated US$7–11 billion in exports, or roughly 18 to 26 per cent of Brazil’s sales to its second-largest trading partner. Within hours, President Luiz Inácio Lula da Silva’s administration unveiled a R$18.5 billion (US$3.4 billion) support package—the third phase of the Plano Brasil Soberano—offering subsidised credit lines to affected exporters, while Vice-President Geraldo Alckmin explicitly ruled out immediate retaliation, stating that an “eye for an eye” approach would leave both sides blind.

The tariff is the product of a year-long investigation under Section 301 of the US Trade Act of 1974, which allows Washington to act against practices it deems unfair or unreasonable. The US Trade Representative’s report cited Brazil’s instant-payment system Pix, digital platform regulation, barriers to ethanol imports, intellectual property enforcement, and anti-corruption policies as justifications. Brazilian officials reject the allegations as protectionist and politically motivated. Over 2,100 products—including crude oil, coffee, beef, orange juice, and aircraft parts—were exempted, shielding sectors where US consumers or manufacturers would feel immediate price pressure. The remaining list concentrates on industrial goods: machinery, footwear, ethanol, sugar, wood, and certain steel and aluminium products.

Viewed from Brasília, the move is seen as a political signal ahead of October’s presidential election, in which Lula is expected to seek a fourth term. Alckmin described the tariff as “unjust and unfounded,” while the government stressed that the US runs a trade surplus with Brazil. Industry groups, particularly footwear producers in Franca, São Paulo, warn that the US market—which absorbs one in five Brazilian shoe exports—has no ready substitute, and job losses are likely without a negotiated exemption. The support plan channels R$13.5 billion from the Treasury and R$5 billion from the BNDES development bank into working capital, export diversification, and investment lines, with the lowest rates reserved for micro and small enterprises.

The tariff is part of a broader US effort to rebuild its trade arsenal after the Supreme Court struck down earlier emergency-based duties. A temporary 10 per cent global tariff expires on 24 July, and Washington is preparing a new wave of levies—potentially 10 to 12.5 per cent—against 60 economies over alleged failures to curb forced labour in supply chains. Brazilian officials expect that measure to be announced by Friday, raising the possibility of cumulative rates reaching 37.5 per cent on some goods. The next milestone is the forced-labour tariff decision, which will test whether the Lula government’s preference for negotiation can coexist with a US strategy that treats tariffs as a permanent bargaining tool.