United States (US) President Trump issued an Executive Order on 30 July 2025, imposing a 40% ad valorem duty on Brazilian-origin imports, effective 6 August 2025.

The additional tariff stacks with existing tariffs (except Section 232) and excludes specific products such as civilian aircraft, aluminum, energy products and select agricultural goods.

Executive Order

The Executive Order, titled "Addressing Threats to the United States by the Government of Brazil," imposes an additional ad valorem duty of 40% on Brazilian-origin products imported into the US. The tariff will apply to goods entering the United States for consumption or withdrawn from a US bonded or Foreign Trade Zone warehouse for consumption on or after 12:01 a.m. eastern daylight time, 6 August 2025, seven days after the date of the order. Certain exceptions apply, including goods that were already in transit before the effective date.

Scope and stacking

The new ad valorem duty is in addition to any other applicable duties, fees, taxes or charges on imports. However, it will not apply to articles that are exempted under specific provisions or those already subject to existing tariffs under Section 232 of the Trade Expansion Act of 1962. The Executive Order also clarifies that the additional duty will stack with any tariffs imposed under previous Executive Orders, including the 10% tariff measure announced in April. (See EY Global Tax Alert, US imposes President's Reciprocal Tariff Policy against trading partners and ends duty-free treatment for low-value shipments from China, dated 3 April 2025.)

Annex I of the Executive Order exempts certain products from the new tariff, including:

• Civilian aircraft and parts/components thereof
• Aluminum and related products
• Wood pulp and paper products
• Energy products (e.g., petroleum, fuel)
• Fertilizers
• Orange juice and select agricultural products
• Iron ore

Actions for businesses to consider

Affected companies should consider the following actions:

• Evaluate the implications of the 50% tariff on the company's import strategies and pricing models
• Analyze the business's supply chains to identify potential impacts from the increased tariffs and consider alternative sourcing options if necessary
• Consider valuation planning, such as bifurcating product and non-product costs and first sale for export to manage the increase in duty
• Identify potential approaches to leverage under the Chapter 98 Special Classification Provisions to mitigate duties for certain products based on their use or condition (e.g., goods returned after having been exported, goods being temporarily imported, goods imported for the use of certain nonprofit institutions
• Flag related-party entries imported into the US for reconciliation to account for potential retroactive reductions in transfer price to enable filing the adjustments and securing potential refunds
• Review US-continuous-import-bond sufficiency to help prevent goods' being stuck at the border due to insufficient bond and stacking liability
• Consult with legal and trade advisors to navigate the complexities of the new tariff structure and help in complying with the Executive Order