Brazil; U.S. Imposes 25% Tariff on Brazilian Products; Rio Operation Dismantles Money Laundering Network Linked to CV and PCC; Brazil’s Amazon Deforestation Falls to 10-Year Low.

Friday, July 17, 2026. Brazil: Political Uncertainty, Economic Pressure and a Growing International Role Brazil enters the second half of 2026 at an important political and economic crossroads. As the country moves closer to its October presidential election, public attention is increasingly focused on inflation, government spending, public security and the future direction of Brazil’s foreign policy. President Luiz Inácio Lula da Silva remains at the center of the political landscape, while conservative movements continue reorganizing amid the legal and political difficulties surrounding former President Jair Bolsonaro. The result is an increasingly polarized environment that is likely to shape national debate throughout the coming months. Economically, Brazil continues to demonstrate resilience, although growth is slowing and inflation remains above the Central Bank’s preferred target. Rising food prices and the continued cost of essential goods are placing pressure on Brazilian households, while relatively high interest rates continue to affect borrowing, investment and consumer confidence. At the same time, Brazil is facing new uncertainty in its commercial relationship with the United States, following the announcement of possible tariffs affecting a wide range of Brazilian exports. These tensions may encourage Brasília to strengthen its relationships with China, India and other emerging economies through BRICS and additional international partnerships. Brazil also continues to promote its position as a global leader in renewable energy, agriculture and natural-resource development. Recent changes to the country’s ethanol requirements reflect its efforts to reduce dependence on imported fuel while supporting domestic production. Nevertheless, serious challenges remain, particularly organized crime, public security, fiscal pressure and the need to balance economic development with environmental protection. Together, these developments make Brazil one of the most important countries to watch in Latin America as the political campaign intensifies and the government responds to growing domestic and international pressures. Brett Mikkelson Founder, B.M. Investigations, Inc. – Private Investigations in Panama TOP NEWS and TIDBITS: The United States Imposes a 25% Tariff on Brazilian Products The U.S. government issued a resolution on Wednesday night (July 15) imposing a 25% tariff on products exported from Brazil. The measure, adopted under Section 301 of the U.S. Trade Act, will take effect next Wednesday (July 22). As reported by Valor, although the administration of President Luiz Inácio Lula da Silva viewed a new across-the-board tariff increase as virtually inevitable and considered the process led by the Office of the United States Trade Representative (USTR) to be ideologically driven, it believes the United States may still expand the list of products exempt from the new 25% tariff. Lula’s administration has sought to demonstrate to the White House that it remains willing to negotiate. Exemptions The USTR measure exempts more than 2,000 products from the new tariff. These are in addition to items that had already been excluded, including certain types of meat, coffee, fruit, iron, and aircraft parts. Newly exempt products include pig iron, unflavored instant coffee, organic honey, aluminum hydroxide, iron and steel scrap, certain seafood products, leather, selected wood products, medicines and pharmaceutical inputs, as well as antiques, works of art, and used clothing. The Office of the United States Trade Representative (USTR) stated that these products are important inputs for U.S. industry, have limited domestic availability, or are difficult to replace with supplies from other countries. As a result, imposing the additional tariff could increase costs and disrupt U.S. supply chains. In several cases, the agency argued that the United States depends on Brazilian supplies or that imposing the tariff would cause greater harm to the U.S. economy than it would exert meaningful pressure on Brazil. Exemption Requests Rejected Not all exemption requests were approved. The U.S. government rejected requests from sectors including agricultural and industrial machinery, apparel, footwear, electrical equipment, gardening tools, paper, organic sugar, and various manufactured goods. Although companies warned of higher costs and difficulties in replacing Brazilian suppliers, the USTR concluded that these products could be sourced from other markets or that the economic consequences did not justify exempting them from the tariff. The final resolution also tightened certain aspects of the original proposal. The agency removed high-purity cellulose from the exemption list after receiving complaints alleging that Brazilian producers benefited from practices linked to illegal deforestation. It also limited exemptions for certain chemical products to pharmaceutical applications, maintaining the tariff when those products are used for other industrial purposes. Industry Response Brazilian industry groups expressed concern after the United States announced the new tariff. The National Confederation of Industry (CNI) stated that it is closely monitoring the 25% tariff confirmed by the United States on Wednesday. According to the CNI, the additional tariff intensifies the pressures already affecting Brazilian exports and creates greater uncertainty for businesses in both countries. “The effects of higher U.S. tariffs are increasingly being felt across Brazilian industry: 20 of the country’s 27 states reduced their exports to the U.S. market during the first half of the year. Following today’s announcement, the situation is likely to worsen, further eroding the competitiveness of Brazilian industry. We must do everything possible to reverse this trend and restore the relationship that Brazil and the United States have built,” said Ricardo Alban, President of the CNI. The tariffs adopted by the United States since 2025 have already affected bilateral trade. Brazilian exports to the U.S. market fell 13%, equivalent to approximately US$2.6 billion. The decline was partly driven by an 8.7% decrease in industrial goods exports, particularly semi-finished iron and steel products, pig iron, chemical wood pulp made from non-coniferous materials, petroleum oils, and semi-finished products made from other steel alloys. Despite the decline, the United States remained the largest destination for Brazilian manufactured exports during the period. The impact of the tariffs introduced since 2025 is also reflected at the state level. During the first half of this year, 20 of Brazil’s 27 states, as well as the Federal District (Brasília), recorded lower exports to the United States compared with the same period in 2025. Competitive Pressure The Federation of Industries of the State of Minas Gerais (FIEMG) also