Strategy · BR → EU
The US Section 301 tariff, and the case for a second corridor
Jul 13, 2026 · 6 min read
In short
On 1 June 2026 the Office of the US Trade Representative determined that a set of Brazilian policies — covering digital trade and electronic payments, preferential tariffs granted to Mexican and Indian goods, anti-corruption enforcement, intellectual property, ethanol market access and deforestation — burden US commerce, and proposed a 25% Section 301 tariff on Brazilian imports. The statutory deadline for the responsive action falls on 15 July 2026, so at the time of writing the measure is proposed rather than in force. A large exemption annex spares many goods — coffee, orange juice, iron ore, civil aircraft parts and pharmaceuticals among them — but notable products such as basic pig iron are left exposed, and a separate Section 301 track could add further duty on top. For an exporter whose US margin has become uncertain, the timely move is to model the alternative rather than wait for the ruling: the EU–Mercosur tariff cuts have applied provisionally since 1 May 2026, so duty relief into Europe is usable today, not a 2027 prospect. This brief sets out what the measure covers and how to weigh a European redirect.
On 1 June 2026 the Office of the US Trade Representative closed a Section 301 investigation into Brazil and proposed a 25% tariff on Brazilian goods entering the United States. A statutory deadline for the responsive action falls on 15 July 2026, which means that at the time of writing the duty is proposed and consulted on, not yet charged at the border. For any Brazilian exporter with meaningful US volume, that short window is the moment to plan, because a decision either way is close.
The grievances behind the case are largely diplomatic and sit well above the level of any single shipper. The USTR pointed to Brazil's handling of digital trade and electronic payment services, preferential tariff treatment granted to hundreds of Mexican and Indian goods, insufficient enforcement against bribery and counterfeiting, the ethanol tariff Brazil reintroduced in 2017, and weak enforcement against illegal deforestation. None of these is something an individual exporter can resolve; they are a state-to-state dispute in which private firms simply bear the cost.
The measure would apply broadly, but not evenly. USTR published a large exemption annex sparing many categories — coffee, orange juice, iron ore, civil aircraft parts and a range of pharmaceuticals among them — so a good deal of Brazil's headline export basket is carved out. Other products are not: basic pig iron, for instance, was left off the exemption lists, and a separate Section 301 track could stack a further duty on top of the headline rate for some goods. The practical first step is unglamorous: check your own HTS codes against the annex before assuming you are either safe or exposed.
This is where a second corridor stops being theoretical. Brazil has been diversifying its trade away from the United States for over a year, and EU imports from Brazil have risen sharply as the EU–Mercosur agreement has moved forward. Crucially, the agreement's trade pillar has applied provisionally since 1 May 2026, so its day-one tariff cuts are live now — the relief into Europe is something an exporter can use this quarter, not a benefit that waits on full ratification in 2027 or 2028.
None of which makes Europe a drop-in replacement for a US order. The EU is a different market with its own entry conditions — CE marking and REACH for many industrial and chemical goods, EUDR due diligence for soy, beef, timber, coffee and their derivatives, and a distributor and certification base that takes time to build. Redirecting volume is a real project, not a switch, and the honest version of the plan accounts for the paperwork and the lead time as much as the tariff arithmetic.
For an exporter watching the 15 July deadline, the useful work is comparative: put the US landed cost under the proposed tariff next to the EU landed cost under the provisional Mercosur rates, for your own product codes, and see which corridor actually carries the margin. A short Opportunity Scan can map your goods to both regimes, flag the certification each requires, and size the difference before the decision in Washington forces the question.
Business intelligence, not legal or tax advice.