Section 301 25% - BRAZIL
Dear Readers,
The Office of the U.S. Trade Representative took final action yesterday, imposing a 25% Section 301 tariff on most products of Brazil. It takes effect at 12:01 a.m. ET on July 22.
If you have Brazilian cargo moving, you have about six days. Here is what applies, what does not, and what to do before the clock runs out.
The Mechanics
The additional duty attaches to covered goods entered for consumption, or withdrawn from warehouse for consumption, at or after 12:01 a.m. ET on July 22. Note that this is an entry trigger, not a sailing trigger. Where the cargo is on the water does not matter — what matters is when it clears.
Covered merchandise must be reported under new HTSUS heading 9903.05.01.
The in-transit exception is narrow and short. Goods loaded onto the final vessel and already in transit before the effective time may qualify if they are entered for consumption, or withdrawn from warehouse for consumption, before 12:01 a.m. ET on July 29. That is a one-week window, and it does not apply to air freight or border crossings. Ocean only.
What is exempt
USTR published exemption annexes running to well over a thousand HTSUS subheadings. The broad categories:
Products classified under HTSUS provisions specifically identified in the notice
Civil aircraft and qualifying aircraft parts and components
Certain products used in pharmaceutical applications
Brazilian goods already covered by designated Section 232 tariffs — certain metals, vehicles and vehicle parts, wood products, and semiconductors
Humanitarian donations and informational materials
Accompanied baggage for personal use
Most goods properly entered under Chapter 98
Some of Brazil's largest exports to the US landed on the exemption list, including coffee, beef, oranges and orange juice, Brazil nuts, and certain petroleum products.
Do not rely on that summary, or any summary, to decide whether you are covered. The exemptions are written at the HTSUS classification level, and several carry specific use or scope limitations. A product that sounds exempt in plain English may not be exempt at the tariff line. Check your actual classifications against the notice.
The part most coverage is missing
Two things sit just past this announcement, and both should shape how you plan.
A second Section 301 action concludes around July 24. There is a separate, ongoing investigation into forced labor in supply chains covering dozens of countries, and Brazil is among them. Reporting indicates it could result in an additional 12.5% duty. If that lands as expected, Brazil's exposure goes to 37.5% — not 25%. If you are building a landed-cost model this week off the 25% figure, understand you may be modeling the wrong number by month's end.
This is a template, not a one-off. This is the first tariff action under the strategy the administration built after the Supreme Court struck down its IEEPA authority in February. USTR has opened roughly 80 trade investigations. China, the European Union, India, Japan, South Korea and Mexico have all been named in reporting as potential subjects of future actions.
That is the real takeaway for most of you. The majority of our clients do not import from Brazil. But the mechanism now pointed at Brazil is the same mechanism that may be pointed at your origin country, and yesterday showed you exactly how it moves: investigation, proposed action with an annex, comment period, hearing, final action, one week to the effective date.
Do not confuse this with the Section 122 sunset
Separately, the 10% Section 122 global surcharge hits its 150-day statutory limit on July 24 and expires unless Congress acts. We have had a number of clients ask whether that means a clean 10% off their landed cost starting the 25th.
It might. It also might not, and this week is why. Section 301 and Section 232 actions are moving product by product and country by country. A broad surcharge coming off does not mean your specific duty stack goes down by the same amount — it means one line disappears while others may appear. Model both.
One more piece: the Court of International Trade struck the Section 122 surcharge down in May and the Federal Circuit stayed that ruling in June. The duty is still being collected. Refund rights may become relevant later depending on how the appeal resolves, so preserve your documentation now rather than reconstructing it in a year.
— The Chain Logic Team
