“Although the illegality has been recognized, the effects of the decisions are still limited…”
Leonardo Munhoz is a researcher and professor at FGV Agro and FGV Bioeconomia, with a master’s degree in business law from FGV and a master’s and doctorate in environmental law from Elisabeth Haub School of Law – Pace University.
AgriBrasilis – Are the US tariffs illegal?
Leonardo Munhoz – Yes. Both the Court of International Trade (CIT) and the Federal Circuit have already declared that the 50% tariffs imposed by the Trump administration are illegal. The central argument was that the International Emergency Economic Powers Act (IEEPA) does not grant the president the power to create tariffs with global and permanent reach.
Congress has always required explicit authorization when delegating tariff powers, and Supreme Court jurisprudence (Major Questions Doctrine) reinforces that measures with significant economic impact can only be authorized by clear law.
AgriBrasilis – What was the basis for the US government imposing these tariffs?
Leonardo Munhoz – Trump justified the tariffs with political and environmental arguments. On the political side, he cited Bolsonaro’s trial in the Supreme Court and internet regulation in Brazil. On the environmental side, he claimed that Brazil was allowing illegal forestry practices that would harm the competitiveness of US farmers.
In the Mississippi Senate, Brazil was accused of manipulating timber and agricultural markets. In practice, the environmental discourse served as a protectionist tool, ignoring the fact that Brazil already has one of the strictest forestry laws in the world, with mandatory preservation obligations (APPs and Legal Reserves) that are far superior to the voluntary rules of the US system.
AgriBrasilis – Why are the tariffs still in effect?
Leonardo Munhoz – Although the illegality has been recognized, the effects of the decisions are still limited. The CIT initially granted a universal injunction (canceling tariffs for everyone), but the Federal Circuit revoked this scope, restricting the benefits only to the parties to the case. Thus, importers who filed suit are already entitled to a refund of the amounts paid, but others (including those who purchase Brazilian products) are still subject to tariffs until a new decision is made. In addition, the government can appeal to the Supreme Court until November 2025, which prolongs the uncertainty.
“…Brazil has remained cautious, avoiding immediate retaliation, awaiting a clearer definition from the US courts.”
AgriBrasilis – Which Brazilian products are being most affected?
Leonardo Munhoz – The tariffs have affected exports across the board, impacting both agribusiness (soybeans, meat, coffee, wood) and industrialized products. The most significant impact is in sectors where Brazil is highly competitive and has a strong presence in the US market, such as beef and chicken, cellulose, orange juice, wood, and furniture. These segments suffer both from a loss of competitiveness and from legal instability, which makes long-term contracts difficult.
AgriBrasilis – After almost two months of high tariffs, what has changed in Brazil-US trade?
Leonardo Munhoz – Bilateral trade has been marked by a drop in Brazilian exports and the redirection of cargo to other markets. American importers face increased costs and contractual uncertainty, especially in chains dependent on Brazilian agricultural and forestry commodities. Logistics and trading companies have adopted defensive strategies, such as filing their own lawsuits to try to suspend the application of tariffs. On the diplomatic front, Brazil has remained cautious, avoiding immediate retaliation, awaiting a clearer definition from the US courts.
AgriBrasilis – What are the possible scenarios for the coming months?
Leonardo Munhoz – Three main scenarios are emerging:
Immediate retaliation – Brazil could apply retaliatory tariffs based on WTO rules. However, if the Supreme Court confirms the illegality of the tariffs, such a reaction could cause unnecessary diplomatic friction.
Await final decision – A more prudent strategy: wait for the CIT to define the scope of the decision and the eventual ruling of the Supreme Court. If the CIT extends the effects based on the Uniformity Clause of the US Constitution (which requires tax uniformity), importers of Brazilian products may automatically benefit.
Own lawsuits in the US – If the CIT limits the effects to the original parties only, Brazilian companies or importers of their products may file their own lawsuits. The precedent already set is very strong, almost automatically guaranteeing the same result (cancellation of the tariff and refund of amounts paid).
The expectation is that the Supreme Court will maintain its restrictive stance and confirm the interpretation that the president cannot use the IEEPA to create tariffs with global reach. In this case, the tariffs would tend to be eliminated definitively in 2026.
The 50% tariffs against Brazil are illegal and have already been declared as such by two US federal courts. However, they remain in effect for some importers due to procedural limitations and the possibility of an appeal to the Supreme Court. The immediate impact is the loss of competitiveness of key exports from Brazilian agribusiness and industry, with repercussions on contracts and investments. For the coming months, the most realistic course of action is to wait for the CIT to define the scope of the decision, avoiding hasty retaliation, while Brazilian companies consider filing their own lawsuits in the US.
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