Forced labor tariff raises total to 37.5% for Brazilian industry

Brasília – The United States announced on Thursday, January 23, a new 12.5% tariff on Brazilian exports, citing forced labor concerns, effective Friday, January 24. The measure adds to the 25% surcharge already in place this week, raising the total rate to 37.5% on sectors including footwear, machinery, apparel, and non-pharmaceutical chemicals, according to data confirmed by Agência Brasil.

Minister of Development, Industry, Trade and Services (MDIC) Márcio Elias Rosa called the new charge "unfair" and highlighted the reputational damage of the forced labor accusation—a blow to the image of Brazilian products that goes beyond price.

The 25% tariff, imposed two days earlier, affects 19% of Brazilian sales to the U.S., with an estimated impact between US$ 7.2 billion and US$ 11 billion, according to Apex-Brasil and Amcham. A total of 2,300 products were hit, with 52% of the impact concentrated in São Paulo and Santa Catarina. The new 12.5% tariff creates a second front for an industry already adjusting to the first barrier.

Beef, coffee, orange juice, and fruit remain exempt from both tariffs, according to a preliminary list from MDIC. The ministry is still compiling the full list of products subject to double taxation, so exempt item numbers vary across reports, and the technical team advises caution with unofficial lists.

Facing the escalation, the Brazilian government prioritizes diplomacy but does not rule out invoking the Economic Reciprocity Law. Meanwhile, it maintains the Brasil Soberano program, which provides R$ 18.5 billion in credit to mitigate tariff effects. Talks with the U.S. government are expected to resume next month, according to the ministry.

The double tariffing in just three days changes the nature of the trade dispute: the cost is now higher, and the reputational weight even greater.