NextFin news, On Monday, September 15, 2025, the Trump administration escalated its tariff measures targeting Latin American countries, imposing a 50% tariff on most Brazilian imports and a 25% tariff on Mexican goods, excluding those covered under the USMCA trade agreement. These tariffs are part of a broader U.S. strategy to reduce the trade deficit and address perceived unfair trade practices.
President Donald Trump justified the tariffs citing Brazil's alleged unfriendly policies, including the political persecution of former President Jair Bolsonaro, and Mexico's challenges with illegal immigration and drug trafficking at the southern border. The tariffs on Brazil took effect on August 6, 2025, while Mexico's tariffs have been in place with some exceptions for USMCA-covered goods.
Brazil's exports affected by the 50% tariff include key products such as coffee and beef, which are not exempted, while orange juice, minerals, hydrocarbons, wood pulp, and aircraft are excluded. The tariffs have led Brazil to enact the Economic Reciprocity Law, enabling potential retaliatory trade measures. Brazil's government has also deepened its strategic partnership with China, with bilateral trade reaching $188 billion in 2024, as a response to U.S. trade pressures.
Mexico, heavily reliant on exports to the U.S. (over 80% of its merchandise exports), faces tariffs on steel, aluminum, and copper imports, which are not covered by USMCA duty-free provisions. Mexican industries in these sectors are experiencing losses due to the tariffs. Mexican President Claudia Sheinbaum's administration is negotiating tariff reductions in exchange for Mexico's increased efforts to curb drug trafficking, migration, and the flow of Chinese goods entering the U.S. via Mexico. Mexico has also proposed raising tariffs on Asian imports, including cars and auto parts, to as high as 50%.
The tariffs have also impacted the automotive sector, with a 25% tariff on Mexican-made vehicles unless they contain more than 40% U.S. content. This has placed Mexico at a disadvantage compared to Japan and the European Union, which have secured tariff reductions to 15%. U.S. automakers with factories in Mexico, such as General Motors and Stellantis, have reported profit declines linked to these tariffs.
These tariff measures come amid ongoing investigations and legal challenges, including a pending U.S. Supreme Court decision on the legality of the tariffs. The tariffs have created uncertainty for export-oriented firms in Latin America but have also opened market opportunities for some companies. The International Monetary Fund projects modest GDP growth for Latin America in 2025, with Brazil at 2.3%, Mexico at 0.2%, and the region overall at 2.2%, revised upward from earlier forecasts.
Sources for this report include the Americas Quarterly article "Why Trump’s Tariffs Are Doing Limited Harm in Latin America," JD Supra's coverage of U.S. tariffs on Brazil, and Geopolitical Monitor's analysis of the tariffs' political impact in Brazil.
Explore more exclusive insights at nextfin.ai.