U.S.-Brazil economic and legal relations face increased scrutiny amid new designation of Justice Alexandre de Moraes and broad trade actions
On July 30, 2025, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated Brazilian Supreme Court Justice Alexandre de Moraes as a Specially Designated National (SDN) under the Global Magnitsky Human Rights Accountability Act. The SDN designation blocks any property, or interests in property, subject to U.S. jurisdiction and prohibits U.S. persons from engaging in transactions with him. It also extends to entities in which Justice de Moraes holds a 50% or greater ownership interest and prevents U.S. financial institutions and U.S.-branded payment networks operating in Brazil from processing transactions for his benefit.
The action was based on allegations related to human rights and political persecution concerns in judicial proceedings. This marks the first time the Magnitsky Act has been used to impose sanctions on a Brazilian citizen and public authority.
Additionally, on July 30, 2025, and under International Emergency Economic Powers Act (IEEPA) authority, the White House issued an executive order imposing an additional 40% ad valorem duty on most Brazilian imports. The new 40% duty applies on top of the existing 10% IEEPA reciprocal tariff established by Executive Order 14257 (April 2, 2025), bringing the total duty rate to 50%. The new rate takes effect on August 6, 2025, at 12:01 a.m. ET.
While the executive order provides more than 700 product-specific exemptions for key industries — such as aerospace, automotive, energy and certain agricultural goods — major exports, including coffee, beef, fruits, textiles, footwear and furniture, will be subject to the full 50% tariff. However, the 40% duty does not apply to Brazil-origin goods that are subject to existing or future Section 232 actions (e.g., steel, aluminum, copper).
The executive order also has an in-transit exemption for Brazil-origin goods that were loaded onto a vessel at the port of loading and in transit on the final mode of transit prior to entry into the U.S., before 12:01 a.m. ET on August 6, 2025; and are entered for consumption or withdrawn from warehouse for consumption before 12:01 a.m. ET on October 5, 2025.
As the U.S. remains Brazil's second-largest export market, these changes are expected to impact a broad range of supply chains and commercial relationships. For example, these sanctions and trade restrictions signal a more assertive U.S. posture toward Brazil at both the legal and commercial levels. Given the scope of these actions and the existing volume of cross-border activity, companies should be prepared for increased scrutiny of transactions, supply chains and communications with Brazilian counterparties.
Our Latin America practice group is closely monitoring the implementation of these measures and follow-on developments, including regulatory guidance and potential responses from Brazilian authorities. We are actively advising clients on compliance considerations, trade implications and enforcement risks. Through our multidisciplinary team of litigators, regulatory advisors and international trade professionals, we are currently guiding businesses through this evolving U.S.-Brazil legal and commercial landscape.
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