US imposes new tariff on Brazil but exempts pig iron, rare earths

The US will impose a new 25% tariff on Brazilian goods but will exempt several key products critical to US industries, including pig iron and rare earth materials.

The Office of the US Trade Representative announced July 15 that the US will move forward with its proposed 25% tariff on Brazil under Section 301 of the Trade Act of 1974, after the US agency determined that some of Brazil's policies burden or restrict US commerce.

"Brazil's unfair trading practices have prevented US workers and producers from accessing this important market with over 210 million consumers," US Trade Representative Jamieson Greer said in a statement. "Today's action is necessary to address these unfair trade practices to ensure American workers and companies can compete on a level playing field."

The new tariff will take effect on July 22, according to a Federal Register notice.

The final action comes after the agency held two public hearings and received over 360 public comments on the proposed actions as well as negotiations with the Brazilian government to address US concerns.

Pig iron was not originally among the exemptions, which left some in the US steel and metals industries to worry it could undercut their operations. Brazil has been the leading exporter of the raw material to the US in recent years.

Most of the US steel industry's largest players asked the US government to exempt Brazilian pig iron from the tariff, as the US produces an insufficient supply to make up for a trade barrier on Brazilian pig iron and a tariff would only raise their costs.

The US imported 3.3 million metric tons of pig iron from Brazil in 2025, accounting for more than half of the 5.3 million mt the US imported that year, according to S&P Global Market Intelligence's Global Trade Analytics Suite. Oklahoma-based USA Rare Earth announced plans in April to acquire the Brazilian Serra Verde rare earths project for $2.8 billion.

"The Trump administration has demonstrated an ironclad commitment to rebuilding America's steel industry and securing critical supply chains," Brandon Farris, executive vice president of the Steel Manufacturers Association, a trade group, told Platts in response to the USTR's decision. Platts is part of S&P Global Energy.

SMA represents the US electric arc furnace steel industry and called for pig iron to be exempt from the new tariff on Brazil. Over 70% of US steel production uses EAFs, which typically do not process raw iron ore, but can use a mix of pig iron and scrap.

In June 2025, US President Donald Trump imposed a 50% tariff on steel imports under Section 232 of the Trade Expansion Act of 1962 as part of his economic agenda to boost US manufacturing amid concerns about what some in the steel industry see as an oversupply of cheap imports in the global market.

So far, the protectionist move has dissuaded some US-based buyers from importing steel, raised US steel prices and enabled domestic steelmakers to increase margins and supply.

Farris previously warned US officials that a tariff on Brazilian pig iron would undercut the recent investments in the US steel industry spurred on by policies imposed by the Trump administration.

"The Section 232 steel tariffs remain the most consequential pro-manufacturing trade action in a generation, and ensuring other trade enforcement actions complement them, as USTR has done here, creates a powerful framework that levels the playing field, drives investment, expands American steel production, and strengthens both our economic and national security," Farris added.