The tariff dispute that has run between Washington and Brasília since July is heading into a new round, and for the first time in months the next move belongs to Washington. Brazil's government says it is waiting on a written proposal from the United States in November, and it has said repeatedly that it will not make the first offer, on the grounds that the tariffs came from the American side.
The timing changed over the weekend. Luiz Inácio Lula da Silva won a fourth term in Brazil's run-off on October 25, and on Monday Brazilian government sources told Folha de S.Paulo that Washington had signaled willingness to reopen talks on the duties, which reach 37.5% on some goods. The White House has not commented publicly, and no tariff cut has been announced.
How the 37.5% was built
The rate is the sum of two separate actions taken nine days apart. On July 15 the Office of the United States Trade Representative announced an additional 25% tariff on certain Brazilian products under Section 301, after a year-long investigation; a Federal Register notice dated July 20 applied it to goods entered from July 22. On July 24 a second Section 301 action, tied to enforcement against forced labor in supply chains, added 12.5%. Where both apply, the total is 37.5%.
The two measures have different scopes and different exemption lists. Coffee, beef, orange juice, aircraft parts and oil and gas products were left out. Together, according to the Confederação Nacional da Indústria (National Confederation of Industry), the measures cover 3,985 products worth $10.8 billion. Brazil referred the dispute to the World Trade Organization on July 27.
What the tariffs have done to the trade
The damage is concentrated rather than general, which is what the exemption lists were designed to produce. Brazilian exports to the United States fell 6.5% to $27.5 billion from January to September, according to Amcham. But exports charged at the 25% and 37.5% rates fell 25.4% over the same period — roughly four times the decline in the total.
That gap is the clearest argument each side brings to the table. For Brasília it is evidence of a measure aimed at specific sectors; for Washington it is evidence that the measure works.
Nine months of talks that produced a working group
The negotiating record so far is thin. Lula and Donald Trump spoke by phone on August 21, and Trump asked his officials to meet quickly. Talks resumed by video conference on August 31, with Foreign Minister Mauro Vieira, Development Minister Márcio Elias Rosa and Trade Representative Jamieson Greer; Rosa told reporters afterward that the session "did not achieve progress on any negotiating issue." On September 30, Rosa and Vieira met Greer in Milwaukee and agreed to set up a working group. Greer said Washington had several measures drafted, argued that Brazil's election limited its flexibility, and rejected Brazil's request to suspend the tariffs while the talks ran.
On October 8, Rosa said Brazil expected a written American proposal in November and that the election would stay off the table. That proposal is now due in a month when the Brazilian side it would be addressed to is a re-elected government with a mandate until its next inauguration on January 5, 2027 — which is also when any deal struck in the meantime would begin to be implemented by a new term.
Reporting from Folha de S.Paulo, the Office of the United States Trade Representative, Reuters and Rio Times.
