The effects of overturning Trump’s tariff on Brazil

There is a mix of relief and uncertainty among Brazilian exporters, who this Friday (20) experienced two opposing scenarios: the Supreme Court overturned Donald Trump’s tariff, but at the end of the day the White House used other means to make it difficult for foreign products to enter the United States.

A few hours after the judicial defeat, Trump announced a new 10% surcharge on almost all imports, based on Section 122 of the 1974 Trade Act. The provision allows the Executive to institute emergency tariffs for up to 150 days, without immediate legislative authorization, to protect the country’s external accounts.

This Saturday (21), the percentage was raised to 15%. The new tariffs come into effect on Tuesday, February 24th, but have a limit of five months — after this period, the government will need to seek approval from Congress to maintain them.

For Monica Araújo, chief economist at InvestSmart XP, the speed of the reaction deepens the uncertainty. “The day was marked by a major upheaval — the Supreme Court’s decision and Trump’s reaction. In any case, there is a significant increase in legal uncertainty in the USA, in the trade agreements signed and in the reindustrialization promised by Trump”, he assesses.

Other barriers remain in force, and bilateral trade felt the impact

In addition to the tariffs overturned by the Supreme Court, other measures continue to affect trade with the USA — the second largest destination for Brazilian exports.

Still in February last year, weeks after Trump’s inauguration, the rates on steel and aluminum were increased. A subsequent surcharge raised the minimum rate to 50%, announced under the justification that Brazil had adopted actions that, according to Washington, threaten national security — including interference in the economy, violations of freedom of expression and political persecution of former president Jair Bolsonaro (PL), the target of legal actions in Brazil.

Direct negotiations between Trump and President Lula (PT) resulted in a partial review of the tariffs. A meeting scheduled for March could advance the removal of additional restrictions, especially on industrialized products.

The result of this tense environment appears in the numbers. Brazilian exports to the USA fell 6.7% last year, reaching US$37.7 billion, according to the Secretariat of Foreign Trade (Secex). Even so, Brazil managed to redirect surpluses to other markets, ending 2025 with US$348.3 billion exported — the highest value in the historical series that began in 1997.

Impact on the industrial and agricultural sectors

Removing the original tariffs immediately reduces the cost of entry of inputs, industrialized products and agribusiness items into the American market. Before the decision, some sectors suffered from additional fees of up to 40%.

Ismar Becker, a consultant for major Brazilian exporters, believes that the news favors, in the short term, products with higher added value. “While there was great concern about coffee and meat exports, higher value-added products — such as furniture, ceramics and industrial components — immediately benefited from the lifting of the emergency measure, considered unjustifiable as there was no imminent external threat,” he says.

Other measures, however, remain in progress: Section 301, which affects the ceramic sector for alleged unfair practices, and national security allegations against the furniture sector. Tariffs on steel and aluminum, imposed based on separate legislation, also remain in force.

Markets react and Brazilian companies stand out

This Friday, the financial market reacted with optimism to the reduction in protectionist tensions. The Ibovespa renewed its historic high, closing above 190,000 points, while the dollar fell to R$5.18. Emerging country stocks and currencies rose on the perception that the decision limits Trump’s unilateral power to intervene in global trade.

Embraer was one of the highlights. The company’s shares accelerated after the decision, as American tariffs impacted between 10% and 13% of Ebitda (earnings before interest, taxes, depreciation and amortization). Taurus Armas also benefited, as it was subject to 50% taxation.

For Edgar Araújo, executive director of Azumi Investimentos, the main gain for Brazilian exporters is greater institutional predictability. “This reduces the risk of unexpected disruptions in contracts and supply chains, allowing for more consistent planning,” he says.

The dispute for reimbursement: a billion-dollar dispute

The decision opens yet another front: the possibility of companies seeking the return of amounts unduly paid to the American government. It is estimated that the US Treasury may have to reimburse up to US$175 billion to global importers.

Tax lawyer Mary Elbe Queiroz highlights that the decision reinforces the principles of legality and separation of powers. “This precedent is relevant for international trade, as it signals that fiscal measures adopted outside institutional limits can generate billion-dollar losses and legal uncertainty for companies and global chains”, he states.

For Brazilian companies, however, the path is not automatic. According to Luís Garcia, from Tax Group, only importers with direct operations in the USA or subsidiaries in the country have the legitimacy to take legal action on American soil. “The American legal system does not usually recognize merely indirect losses, such as loss of market share or reduction in sales”, he warns.

Diplomacy and diversification are paths for Brazil

The overturning of the original tariff brings relief, but does not end the American protectionist agenda. For political analyst Sol Azcune, from XP Investimentos, the trial redefines the country’s institutional limits. “The effect transcends the current government and increases legal predictability in the long term”, he assesses.

The Trump administration, however, continues to seek alternative legal means to maintain its trade policy. “Trump’s long-term tariff strategy is unlikely to be undermined as long as the White House can replicate tariff policy through other means,” says Matthew Ryan, head of market strategy at Ebury, a global financial services company.

The Parliamentary Front for the Machinery and Equipment Industry analyzes the scenario carefully. The entity points out that, although a universal tariff represents a setback in relation to free trade, a uniform rate of 10% would be less harmful than previous punitive charges. According to the parliamentary front, it would not be the ideal scenario, but it would put Brazil on an equal footing with other countries — a more favorable condition than last year’s punitive tariff regime.

For the Brazilian government, the priority now is diplomacy. The meeting scheduled for March between presidents Lula and Trump will be decisive in negotiating the removal of remaining tariffs, especially on industrialized products.