The United States starts collecting an additional 25% tariff on most goods from Brazil at 12:01 a.m. ET on July 22, 2026. Sugar and ethanol are not among the products the U.S. Trade Representative agreed to exempt.
Key Facts
- A 25% tariff on most Brazilian goods takes effect at 12:01 a.m. ET on July 22, 2026. It closes out a Section 301 investigation the USTR opened in July 2025.
- The USTR did not add sugar or ethanol to its exemption list. It did exempt other products, including unflavored instant coffee and organic honey.
- Brazil shipped the US 420,000 metric tons of sugar in 2025, down from 1.12 million tons in 2024. It also shipped 253 million liters of ethanol worth $163 million, its second-largest ethanol export market after South Korea.
The tariff closes out a Section 301 investigation the USTR opened on July 15, 2025, at the president's direction.
It examined six areas of Brazilian trade practice
- Digital trade and electronic payment services
- Preferential tariffs
- Anti-corruption enforcement
- Intellectual property protection
- Ethanol market access
- Illegal deforestation
USTR determined on June 1, 2026, that several of these practices were unreasonable or discriminatory. It then took public comment, held a two-day hearing on July 6 and 7, 2026, and finalized the tariff on July 15.
What the Tariff Covers and Exempts
The 25% duty applies to nearly all goods of Brazilian origin, on top of whatever tariff already applies to a given product.
USTR exempted goods it judged to be raw materials in short domestic supply or products that could cause broader economic disruption if taxed. It also exempted items simply not producible in the US at scale.
The list includes:
- Civil aircraft parts
- Pharmaceutical inputs
- Unflavored instant coffee
- Organic honey
- Pig iron
- Certain wood and seafood products
Brazil's sugar shipments to the US had already fallen sharply before the new tariff took effect. The chart below compares 2024 and 2025 volumes, a roughly 63% drop that shows how exposed this trade relationship already was heading into July 22.
Importers get a narrow window to avoid the new duty. Goods loaded onto a vessel and already in transit before 12:01 a.m. ET on July 22 can still enter duty-free.
They just have to clear US customs before 12:01 a.m. ET on July 29, 2026.
Why Sugar and Ethanol Missed the Exemption List
Sugar and ethanol were both discussed in the comment process. Neither made the final exemption list. Commenters requesting an exemption for organic sugar argued that domestic US production covers only a small share of demand. USTR did not add sugar to the exempted list regardless.
Ethanol's exclusion reflects a different dynamic. Some comments in the record came from the US ethanol industry itself. They argued the 25% tariff was appropriate because it would let American producers recoup market value lost to Brazil's own ethanol tariffs.
Other testimony in the same record warned of a compounding risk. If the 25% rate were combined with other pending Section 301 actions, the total tariff on Brazilian ethanol could reach as high as 37.5%. That would exceed Brazil's own tariff on US ethanol. USTR's final notice does not adopt that combined figure as its own determination; it appears only as testimony cited in the agency's response to comments.
How Brazil's Sugar and Ethanol Industry Is Responding
Brazilian producers called the decision an imbalanced one. The Union of the Sugarcane and Bioenergy Industry (UNICA) said the tariff overlooks asymmetries between the two countries, Reuters reported. Brazilian sugar already faces US tariffs and market-access limits, UNICA noted. Brazil, by contrast, applies a non-discriminatory policy to ethanol imports.
NovaBio executive president Renato Cunha told Reuters the US push for ethanol access without matching sugar concessions amounted to a one-sided ask.
"They want to export ethanol to a country that has no need to import it," Cunha said.
Brazil's corn ethanol association UNEM said the country's tariff regime complies with World Trade Organization rules.
It added that the regime does not violate any bilateral agreement with the United States. UNEM has also pointed to Brazil's rapid growth in domestic corn-based ethanol as the real reason its imports of US ethanol have declined in recent years.