There isn't a single "trade deal" specifically for AI between the U.S. and Brazil in 2025; instead, recent actions show escalating trade tensions and a potential shift from diplomacy to retaliatory tariffs. The U.S. initiated a Section 301 investigation into Brazil's trade practices in July 2025, following a threat of a 50% tariff, which is now a 40% tariff, as part of a political move rather than a response to a trade deficit. This has led to uncertainty about securing access to Brazil's rare earth minerals and a broader impact on businesses and consumers.
Background of the Trade Tensions
Political Motivations: The tariffs and investigation are primarily driven by political factors, particularly former U.S. President Trump's support for former Brazilian President Bolsonaro and his condemnation of the ongoing legal proceedings against him.
Section 301 Investigation: The U.S. Trade Representative (USTR) launched a Section 301 investigation into Brazil's "unfair trade practices," which could lead to further actions, including additional tariffs or other measures.
Tariff Implementation: Starting August 6, 2025, the U.S. began imposing a 40% tariff on certain Brazilian products, with some specific exemptions.
Misleading
Justification: The U.S. claims the actions are in response to trade deficits,
but the U.S. actually has a significant trade surplus with Brazil, highlighting
the political nature of the tariffs.
Impact on Businesses and Consumers
Supply Chain Disruptions: Businesses are scrambling to adjust, with some planning to pass costs on to consumers or cut staff and rework supply chains.
Hither Consumer Prices: Tariffs are expected to lead to higher prices for U.S. consumers on Brazilian products, such as coffee and orange juice.
Threat to Rare Earths: The trade crisis risks derailing discussions about U.S. investment and assistance to help Brazil extract its rare earth minerals, which are crucial for future technologies and reducing U.S. dependence on China.
Brazil's Response and Next Steps
Retaliation Expected: Brazil is expected to respond with retaliatory tariffs to protect its own economy and businesses.
Industry Engagement: The USTR investigation provides a platform for U.S. tech companies and other businesses to submit comments and advocate for fair access to the Brazilian market.
Focus on Other Areas: In addition to the tariffs, discussions are ongoing about enhancing cooperation on critical minerals like rare earths, which could offer long-term benefits if the trade tensions can be resolved.
The prospect of a US-Brazil trade deal involving AI is currently fraught with conflict. In mid-2025, trade relations soured after the US imposed new tariffs on Brazilian goods, triggering a trade dispute. Despite this, specific areas like digital trade and AI governance remain priorities for cooperation for some US stakeholders.
Current
trade dispute (as of August 2025)
· In July 2025, US
President Donald Trump announced a 50% reciprocal tariff on Brazilian goods,
citing a "national emergency" and unfair trade practices.
· The announcement led to
a formal investigation into Brazil under Section 301 of the Trade Act of 1974.
· Brazil responded by
launching a "Sovereign Brazil Plan" to assist its affected exporters
and filed a formal complaint with the World Trade Organization.
· This tension has stalled previous diplomatic talks, including discussions on cooperation for rare earth minerals, which are critical for AI hardware.
Bilateral
cooperation on AI and digital trade
Despite
the tariffs, cooperation on AI and digital trade remains a bilateral interest,
led by non-governmental and previous initiatives.
· Business
engagement: The Brazil-U.S. Business Council continues to advocate for
bilateral cooperation on digital trade issues, including AI, cybersecurity, and
data protection.
· Commercial
Dialogue: In 2024, the US-Brazil Commercial Dialogue announced plans for
workshops on emerging technologies like AI, IoT, and cross-border data flows.
However, the 2025 tariffs have put a hold on most high-level diplomatic
contact.
· Existing protocols: The two countries already have a "Protocol on Trade Rules and Transparency," which covers areas like good regulatory practices and anti-corruption. Some stakeholders see this as a foundation for future digital trade cooperation.
AI
regulation in Brazil
In
parallel, Brazil is actively developing its own robust AI governance framework,
which could influence future digital trade negotiations.
· AI Bill: In
December 2024, Brazil's Federal Senate approved Bill No. 2338/2023, a
comprehensive AI bill that is now with the House of Representatives.
· Key
provisions: The bill is a risk-based framework similar to the EU AI Act,
with obligations for AI developers and deployers. It would also establish a
national authority for AI governance.
· National AI plan: The Brazilian government is implementing its national AI plan for 2024–2028, with over $4 billion in funding for AI infrastructure, talent, and business innovation.
Outlook
The
future of a US-Brazil trade deal, particularly one addressing AI, is highly
uncertain and dependent on the current trade dispute.
· Near
term: Immediate progress is unlikely until the tariff crisis is resolved.
Public comments on the Section 301 investigation were due in mid-August 2025,
with a public hearing scheduled for September 3, 2025.
· Medium term: If
relations stabilize, US business priorities could be channeled through the
Brazil-U.S. Business Council. A potential path forward could involve smaller
"building block" agreements, possibly modeled on USMCA chapters,
rather than a single comprehensive free trade agreement.
· Long term: Future negotiations would have to bridge the differing approaches to AI regulation in the US (minimal federal regulation) and Brazil (risk-based framework). Areas for discussion would likely include digital trade rules, intellectual property rights, and data governance.
https://www.google.com/search?q=us+trade+deal+with+brazil+2025+ai
Brazil,
as one of the original Goldman Sachs coined
"BRIC" countries, co-founded the group in 2009. The initial group
consisted of Brazil, Russia, India, and China, and the first official summit
was held in Yekaterinburg, Russia, on June 16, 2009. South Africa joined
in 2010, expanding the acronym to BRICS.
https://www.google.com/search?q=when+did+brazil+found+brics+established
Comments
The US Mortgage Meltdown in 2008 coupled with the rise of China’s “Belt and Road” initiative resulted in a further decline in US Relations. Brazil led the founding of BRICS in 2009.
The Mortgage Meltdown was caused by US mortgage lenders allowing Unqualified Buyers to buy US homes or face “Discrimination Lawsuits. Then these loans defaulted and the lenders bundled the failed mortgages and sold them. Investors lost $Billions. The US Congress bailed out the Lenders.
President George HW Bush (1989-1993) signed on to UN Agenda 21 and the “Global Warming, Climate Change Hoax” in 1989.
President Bill Clinton (1993-2001) allowed the off-shoring of US Manufacturing to China, Canada and Mexico.
President George W Bush (2001-2008) added $10 trillion to the US National Debt with “Nation Building” in Afghanistan and Iraq.
President Barak Obama (2009-2016) added another $10 trillion to the US National Debt with the “Climate Change Hoax”.
President Donald Trump (2017-2020) added $6000/yr to US Family Household Income.
President Joe Biden (2021-2025 brought the US National Debt to $36 trillion and admitted 21 million unvetted Illegals into the US.
President Donald Trump (2025-2028) is deporting 21 million unvetted Illegals back to their home countries and is restructuring the global economy using Tariffs and Sanctions on “Bad Actors”. He is also upgrading government systems to cut costs and improve data and productivity. He is ending “Military Foreign Aid” and government fraud, waste and abuse. He is returning the US to the US Constitution’s original intent. He is reshoring jobs to US citizens.
Norb Leahy, Dunwoody GA Tea Party Leader
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