U.S. excludes key Brazilian exports from tariffs amid political tensions

U.S. President Donald Trump signed an executive order imposing "an additional ad valorem rate of duty of 40%" on a broad range of Brazilian exports. However, the latest tariff announcement notably excludes several key items, including orange juice, certain aircraft parts, wood pulp, and energy products. The move has resulted in an uptick in the shares of Brazilian aircraf manufacturer Embraer and cellulose and paper producer Suzano, Reuters reported.

According to a U.S. government fact sheet, the tariffs are related to ongoing legal proceedings in Brazil against former President Jair Bolsonaro, who is facing trial for allegedly planning a coup attempt following his defeat in the 2022 election. The executive order coincided with U.S. sanctions against Brazilian Supreme Court Justice Alexandre de Moraes, who is overseeing Bolsonaro’s trial. The U.S. government accuses the magistrate of authorizing arbitrary preventive detentions and repressing the freedom of expression of American citizens.

"Recently, members of the Government of Brazil have taken unprecedented actions that harm and are a threat to the economy of the United States, conflict with and threaten the policy of the United States to promote free speech and free and fair elections at home and abroad, and violate fundamental human rights," President Trump states in his Executive Order.

The head of state claims that Moraes "has abused his judicial authority to target political opponents, shield corrupt allies, and suppress dissent, often in coordination with other Brazilian officials."

"He has also authorized the confiscation of passports, jailed individuals without trial for social media posts, opened unprecedented criminal investigations, including into United States citizens for their constitutionally protected speech in the United States, and issued secret orders to United States social media companies to censor thousands of posts, and de-platform dozens of political critics, including United States persons, for lawful speech on United States soil," the fact-sheet continues.

The order exempts numerous significant Brazilian exports, notably products produced by Embraer, which exports 45% of its commercial aircraft and 70% of its executive jets to the U.S.

A sigh of relief for U.S. orange juice producers

The White House announcement may come as a sigh of relief to Brazil's agricultural sector, which has been bracing itself for the effects of American tariffs. The biggest Latin American country exports 90% of its fruit volume to the U.S., with citrus being one of the main categories in the shipments.

Looming tariffs threatened to spike orange juice prices in American grocery stores, as most of it is made from Brazilian citrus imports. The risk reached such a level of tension that New Jersey orange juice producer Johanna Froods Inc. sued the U.S. government over the tariffs, claiming the executive order would make its business completely unprofitable. Whether the lawsuit will be dropped after the White House announcement is uncertain.

President Trump's executive order, with its 40% tariff on Brazilian goods, goes into effect on August 8. 

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