Effective yesterday, July 22, the U.S. applied 25% tariffs on Brazilian products following an investigation by the Office of the U.S. Trade Representative (USTR) that accused Brazil of unfair practices in its financial markets (such as the PIX payment system), as well as in its ethanol and agribusiness sectors.

Even before this USTR announcement, the broader wave of tariffs introduced at the start of the second Trump administration had ignited global debate over how to negotiate and respond. Brazil, however, is not unprepared. Anticipating such trade barriers, the Brazilian Congress unanimously passed the Economic Reciprocity Law (Law No. 15,122/2025) last year. This framework authorizes proportional countermeasures including retaliatory tariffs, fees, or trade restrictions against nations imposing unjustified barriers on Brazilian goods. Today, policymakers in Brasília are actively debating whether to trigger these mechanisms for the first time.

Historically, Brazil has often found itself in the crosshairs of U.S. tariffs, primarily because many core Brazilian products directly compete with American industries.

For a complete breakdown of affected categories, see our supplemental coverage on specific product impacts:
Which Brazilian Products Will Face the 25% U.S. Tariffs?

In 2018, the Trump administration imposed initial tariffs on steel and aluminum. These were expanded in 2023 following the onset of the Russia-Ukraine war, and have now been expanded again, up to 50%, under Trump’s second term. The U.S. metallurgy and steel sector has been a persistent topic of political and economic debate, having suffered heavy competitive losses to Chinese, Russian, and Brazilian companies such as Gerdau [NYSE: GGB] and CSN [NYSE: SID] expanding in the international market.

Professor Vinicius Müller, PhD in Economic History, Master in Economics, and Professor at Faculdade Belavista, points to other historical precedents, such as the orange juice disputes of the 1980s.

“There are important historical parallels. The case of orange juice in the 1980s is emblematic.”

During that decade, Brazil dominated the international orange juice market, holding an 80% share. From 1965 to 1976, the United States was a net exporter of frozen concentrated orange juice. However, in 1977, unusually cold weather and severe freezes in Florida heavily damaged orange plantations, turning the U.S. into a net importer. The U.S. faced a dual challenge: rapidly expanding Brazilian production and domestic weather instability. By 1978, the price differential between Florida and Brazilian products began to displace U.S. production. By the mid-1980s, U.S. citrus companies formally accused the Brazilian orange juice industry of dumping and unfair trade practices.

At that time, rather than engaging in prolonged legal battles, Brazil chose a diplomatic resolution. To avoid punitive anti-dumping duties, Brazilian producers agreed to price controls, establishing a tariff of $0.34 per gallon of Frozen Concentrated Orange Juice (FCOJ).

While the steel and orange juice disputes were specific to single markets facing external competition, the tariffs applied by the USTR in 2026 are broad-based. They apply to a wide array of products, with hand-picked exemptions based on criteria ranging from national security to the unavailability of domestic alternatives (as is the case with tropical products). Consequently, the current tariff regime is fundamentally different from the last 90 years of trade disputes with the U.S.

It is precisely this shift in scale that makes recent history insufficient for comparison, drawing analysts back nearly a century. As Professor Müller explains:

“In this sense, the Smoot-Hawley Tariff Act of 1930 is more similar, insofar as it was comprehensive. This measure increased U.S. import tariffs under the pretext of protecting American producers affected by the aftermath of the 1929 crisis.”

Enacted on June 17, 1930, and named after its chief congressional sponsors, the Smoot-Hawley Act raised tariffs on over 20,000 imported goods. Conceived with the intention of protecting American farmers and businesses, it instead became a primary catalyst of the Great Depression as foreign nations aggressively retaliated. Unlike today, the U.S. in the 1920s and 30s was a massive net exporter, and the ensuing trade war caused a drop of up to 30% in U.S. exports, deepening the effects of the 1929 crash.

Brazil, at the time, was a deeply agrarian nation reliant on coffee, with the U.S. as its primary market. The impact of the Smoot-Hawley tariffs, combined with the collapse of the U.S. economy after 1929, hit Brazil exceptionally hard.

“Although the impact of this measure on Brazil was very harsh, especially on coffee exports, which were the main Brazilian product at the time it ultimately stimulated a series of changes in the management of both economic policy and the behavior of entrepreneurs and investors themselves,” Müller explains.

The disruption forced the country to reinvent itself. Major coffee conglomerates sought to diversify their operations.

“Following an economic and productive diversification that was already occurring, albeit still timidly, the Brazilian economy sought greater diversification, focused primarily on industrialization and the establishment of new trade partnerships,” says Müller.

In the years following these initial trade shocks, between 1933 and 1939, the Brazilian industrial sector grew by 8.4% annually, while manufacturing growth exceeded 11% per year.

While this forced modernization ultimately strengthened Brazil’s economy, the immediate shockwaves tore through the nation’s political fabric. Economic crises of this magnitude rarely happen in a vacuum. As Professor Müller warns, this industrial silver lining came with profound consequences:

“On the other hand, the cost of these changes was high. It fueled a political shift that culminated in Getúlio Vargas’s October 1930 coup and an aggressive coffee price support policy through the burning of stocks to maintain domestic income. That change also led to a progressive centralization of economic policy, which ultimately led to the Estado Novo dictatorship. On the international stage, the disruption of global trade and the spread of the crisis increased adherence to radicalized, authoritarian projects.”

Fortunately, the current trade friction between Washington and Brasília, while severe, is unfolding in a different era of global economic integration. Unlike the blanket approach of the 1930s that cratered global markets, the 2026 USTR measures have been deployed with specific exemptions designed to protect domestic U.S. supply chains, sparing essential goods like beef, coffee, critical minerals, and aircraft components.

Looking at the current geopolitical landscape, Müller suggests that Washington’s recent measures look to be more carefully calibrated to avoid widespread economic blowback, noting that the new tariffs will likely impact only around 22% of Brazil’s export volume to the U.S.:

“The current protectionist measures of the U.S. government are expected to have a more specific impact on certain sectors, most notably the consumer goods industry and a few others, such as steel. The current U.S. administration is apparently careful not to impact Brazilian products whose shortage in the American market could trigger a rise in inflation,” Müller concludes.