Brazilian exporters rush to ship to U.S. as tariff window narrows

Amid a sense of uncertainty, sectors that escaped the U.S. tariff shock of 40% and 50% and are now subject to a newly established 10% global additional import duty—in effect since Tuesday (24)—are expected to try to bring forward exports to the United States to take advantage of the current, lower tariff.

The concern is not only that the new tariff could be raised to 15%, as U.S. President Donald Trump has mentioned, but also that products could again become targets of a new, heavy surcharge, this time under Section 301.

Calculations by Secex, the Secretariat of Foreign Trade within Brazil’s Development, Industry, Trade and Services Ministry (MDIC), show that before a U.S. Supreme Court decision struck down the tariff shock imposed under IEEPA—the International Emergency Economic Powers Act—22% of Brazilian exports to the U.S. market were subject to additional tariffs of 40% or 50%.

After the U.S. court ruling and executive orders that removed IEEPA-based tariffs, about 25% of Brazilian exports to the U.S. face a 10% tariff that could be raised to 15% if Trump follows through on what he has said.

The new tariffs are based on Section 122 of a 1970s U.S. trade law. Another 46% of Brazilian exports, Secex said, face no surcharge, while the remaining 29% are subject to additional tariffs ranging from 10% to 50% under Section 232, which applies extra duties to products such as steel, aluminum and wood.

Section 301 hit

Despite the more favorable current tax burden, Abimaq—a Brazilian association representing machinery and equipment manufacturers—is working with a scenario in which the 10% rate rises to 15% and in which Brazil suffers an unfavorable outcome in the Section 301 investigation already opened against the country.

José Velloso, Abimaq’s president, noted that Section 301 could bring Brazil-specific surcharges, while the Section 122 global 10% tariff applies to all suppliers.

“An increase in an additional tariff from 10% to 15% may seem like a small thing right now, but the United States is the world’s largest economy, with the biggest trade deficit, which depends on imports. For the American importer, that uncertainty between a 10% and a 15% tariff is not small. It’s a huge insecurity. I believe the new tariff will go to 15%, but it’s not possible to say that for sure or when it will happen,” he said.

“Trump plays with uncertainty,” said Vera Kanas, a trade lawyer and partner at VK Law. “Today the global surcharge is 10%, tomorrow it could be 15%, which is the maximum level allowed under Section 122.”

In Kanas’s view, Section 122 cannot be used to justify tariffs based on the U.S. trade deficit. She said Section 122 is tied to balance-of-payments issues and there is a risk that the U.S. Congress will not endorse the tariffs, which were imposed for 150 days. “The period can be extended for another 150 days or the issue could reach the Supreme Court again.”

Footwear sees edge

Haroldo Ferreira, executive president of Abicalçados, Brazil’s footwear industry association, said Brazilian shoes are now more competitive in the U.S. That follows the removal of the IEEPA-based tariff shock and the adoption of the new Section 122 duty, which replaced a 50% surcharge

The global rate, he said, “eliminates the tariff advantage that other producing countries, especially Asian ones, had over Brazilian products in the U.S. market.” Even so, the association said the new tariff environment has prompted “cautious optimism.”

Until the tariff shock took effect in July 2025, Brazilian footwear exports to the U.S. were up 15.3% in pairs versus the same period of 2024. Under the surcharge, exports to the U.S. fell 23.4% in volume from August to December 2025 compared with the same months of 2024, Abicalçados said.

Investigation looms

Another source of uncertainty, Velloso said, is Section 301, the U.S. law underpinning an investigation opened last year against Brazil. The allegations involve unfair or discriminatory practices affecting U.S. trade and span a wide range of issues, from digital trade and electronic payment services such as Pix, to intellectual property duties and environmental matters.

Velloso recalled that he went to Washington, D.C. in September, to the Office of the U.S. Trade Representative (USTR), to follow the process. Brazil’s defense in the investigation, he said, was “very good.”

“However, just as the opening of the case was political, I believe the outcome will be political. So despite the strong defense and the accusations being baseless, I believe Brazil will lose. In that case, the U.S. government can impose any rate on any Brazilian product, at any time,” he said.

In that scenario, he said he expects the target would be products that were subject to the tariff shock before the Supreme Court ruling.

The main sector hit by the 40% and 50% IEEPA surcharges, Velloso said, was machinery and equipment. He fears the Section 301 case could be decided at the end of May or sometime in June.

For that reason, he said his guidance has been for companies in the sector to try to bring forward sales to the U.S., if possible with shipments by mid-April, around the 15th. That assumes the full export process until unloading in the U.S. takes, on average, 45 days.

Push to ship early

José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), said the general recommendation is to bring exports forward where possible, even though doing so requires negotiation with the U.S. importer and exchange-rate swings are not very helpful.

He also noted that many products exempted from the across-the-board 10% tariff are commodities, which tends to reduce the share of higher value-added goods in Brazilian exports to the U.S.

For Kanas, the concern about Section 301 is justified. She described it as a tool that gives Trump a firmer legal footing for imposing tariffs.

“It has been used before because it has a more solid legal basis, it is unlikely to be challenged by the Supreme Court, and it can result in quite high tariffs,” she said.

In addition, she said U.S. lawyers view Section 301 tariffs as difficult to revoke.

She noted that Trump has recently threatened some trading partners, such as the European Union, to keep agreements reached under tariffs that were later struck down by the Supreme Court.

Section 301, she explained, requires a prior investigation, and opening a case for each country can demand time and work from the U.S. government. For Brazil, however, the investigation was opened on July 15 last year and is already advanced, she said. “They may want to use Brazil as an example for other countries,” Kanas said.

Section 232 adds complexity

Velloso also said the tariff landscape has become more complex. Part of the machinery and equipment sector remains subject to Section 232 tariffs, he noted. Section 232 imposes specific surcharges justified as protecting the U.S. steel and aluminum industry.

Steel and aluminum were already subject to 50% tariffs under Section 232, he said. But on July 30, 2025, the U.S. government added certain steel-intensive products to Section 232, affecting road-building machinery and so-called “yellow iron,” including construction, mining and earthmoving equipment.

Datamar data show that, throughout 2025, Brazil shipped just 5,448 TEUs of steel to its northern trading partner, a 35.4% drop compared with 2024.

Below is the month-by-month volume of Brazilian steel shipments to the United States since January 2022, according to data from the DataLiner foreign trade intelligence platform.

Steel Exports to the U.S. | Jan 2022 – Dec 2025 | TEUs

Source: DataLiner (click here to request a demo)

“As a result, when the machine is shipped to the U.S., the export documentation has to state how much steel represents in the machine’s cost,” he said. In a machine where steel accounts for 20% of the cost, he added by way of example, a 50% tax—the Section 232 tariff—is applied to that 20% share. The remaining 80% pays 10%, the new general tariff currently applied to Brazil.

Abimaq’s exports totaled $14 billion in 2025, with the U.S. remaining the top market at $3.2 billion. Before the tariff shock, sales to the U.S. reached $4 billion, he said. The drop was not larger because there were contracts already in place for intragroup trade.

In addition, because the sector’s exports are geared to specific applications, U.S. importers continued buying from Brazil. If the tariff shock had persisted, he said, intragroup contracts might not have been renewed over time and U.S. buyers could have found new suppliers.

Source: Valor International

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