Brazil absorbs Trump's heaviest tariff blow among major exporters.

Brazil woke up on Thursday as the country whose US tariffs have risen the most since Donald Trump's return to the White House — a singular distinction among the thirty largest economies exporting to the United States, and one that places Brasília before one of the most delicate foreign policy and economic dilemmas in recent years.

On Wednesday night, the American government confirmed the imposition of additional 25% tariffs on Brazilian products under Section 301 of the US Trade Act, closing an investigation opened exactly one year ago. The measure takes effect on July 22 and hits roughly 4,000 items, putting at risk US$11 billion in exports — the equivalent of 26% of Brazil's export basket to the United States, according to the Confederação Nacional da Indústria. Amcham Brasil goes further, estimating that, combined with tariffs already in force, Brazilian exports could face a cumulative additional levy of 37.5%. Before the new tariff package, the average duty applied to Brazilian goods stood at 11.7%; after Section 301 takes effect, Global Trade Alert analysts estimate that average will jump to 18.22% — the second highest among all countries, trailing only China.

The list of more than 2,100 exempted products brought some immediate relief: beef, coffee, orange juice, and aerospace parts were left out, leading analysts consulted by Folha de S.Paulo to estimate that the effective rate will fall to around 16%, below the 25% headline. But that relief is partial and fragile. Sectors previously exempt that will now be taxed — dissolving pulp, paper, wood panels, MDF, furniture, footwear, and textiles — are already tallying losses and warning of layoffs. The chemical sector calculates additional costs of US$133 million on an annualized basis. And sectors that escaped this round fear a new 12.5% tariff that could be imposed as soon as next week based on a US investigation into forced labor.

The Office of the United States Trade Representative signaled that the tariffs could be reduced or expanded depending on Brazil's response — making the situation even more volatile. The original investigation cited Pix as an instrument harmful to American payment companies, along with criticism of Supremo Tribunal Federal rulings against big tech and accusations of complicity with corruption. Secretary of State Marco Rubio publicly stated that Brazil was tariffed because President Lula "did not negotiate in good faith," a declaration Foreign Minister Mauro Vieira described as a "gross and arrogant attack." Development Minister Márcio Elias Rosa revealed that Washington had gone so far as to demand full opening of the chemical sector, a reduction to zero of tariffs on industrial goods, access to the automotive market, and restrictions on investments in critical minerals and rare earths — demands the Brazilian government refused as a violation of national interest.

Brasília responded on both available registers: the rhetorical and the financial. The Lula government immediately announced it will invoke the Reciprocity Law, approved unanimously by Congress, and Vice President Geraldo Alckmin said the country will know how to deploy it "at the appropriate moment." At the same time, BNDES asked the Finance Ministry to release an additional R$7.25 billion to reinforce credit lines under the Brasil Soberano program, aimed at companies affected by the tariffs. Economists differ on the wisdom of retaliation: Sandra Rios, of Cindes, characterized invoking the Reciprocity Law as a potential "shot in the foot," with more domestic political effect than practical impact; Oliver Stuenkel, of FGV, warned that "not even sectors exempt today can rest easy," since the essence of the Trump administration is to generate uncertainty. In the US Congress, Democratic Senator Tim Kaine criticized the tariffs during the confirmation hearing of the nominee for ambassador to Brazil, arguing that the sanctions could hurt the United States itself.

The domestic political dimension of this episode is inseparable from the economic one. The Genial/Quaest poll released on Thursday showed that 51% of voters believe Flávio Bolsonaro asked Trump for the tariffs — a share that has grown since June — while 42% say the measure increases their willingness to vote for Lula. Valor Econômico analysts assess that, in the short term, the episode wears down Senator Flávio more than the president, though negative economic effects could reverse that dynamic if sectoral impacts deepen. The geopolitical complication runs further: US-based Tronox suspended negotiations with the Bahia state government over rare earths exploration amid the diplomatic impasse, illustrating how commercial tensions are already beginning to contaminate strategic investment flows.

Markets calibrated the shock with surgical precision. The dollar closed up 0.4%, at R$5.099, and the Ibovespa retreated in a session marked by sour global sentiment, aggravated by pressure on semiconductors in New York. Future rates also climbed, pressured by a Treasury auction and by external factors. The environment was already tense before the tariff blow: the Finance Ministry raised its official inflation projection to 5.1% for 2026, above the Banco Central's target, attributing the revision to El Niño's impact on food prices. Safra Asset's chief economist, Daniel Weeks, cut straight to the point in summarizing the picture: "This is not the time to take much risk," he said, noting that FX and sovereign bond yields already embed an electoral premium, while public debt should end the year near 82% of GDP.

Agribusiness, which has always served as Brazil's external cushion, is now navigating a peculiar tension. The grain harvest is a record — 360 million tons, according to Conab — but the Gross Value of Production is down 5% in real terms owing to falling prices. Meatpackers have reduced slaughter and begun layoffs after exhausting the Chinese beef quota, with estimated losses of US$4.5 billion relative to the 2025 record. Overlaying all of this is a long-term dimension quantified in a study by the IDB: climate change has already cost Brazilian agriculture the equivalent of R$200 billion in lost income since 1985, quietly and structurally eroding productivity.

On the domestic front, the week produced two additional warnings about the cost of the institutional environment for business. The package of unrelated riders approved by the Senate Infrastructure Committee could add R$60 billion per year to electricity bills — reaching R$2 trillion over 30 years, according to industry estimates. And a study revealed that 66.2% of invoices processed by large