Trump Executive Order Adjusts Reciprocal Tariffs to 40% on Brazil and 15% on EU Amid Trade Strategy Shift

Trump signed an executive order on July 30, 2025, amending reciprocal tariff rates for several countries, with the aim of addressing U.S. trade deficits and perceived unfair trade practices. The order, part of a broader strategy outlined in Executive Order 14257, recalibrates tariffs to reinforce strategic leverage over key trading partners while promoting bilateral negotiations.

Among the key changes, Brazil was subject to a 40% tariff on all products, with certain exceptions for specific 8-digit HSUS classifications. In response, Brazilian President Lula has warned of potential retaliatory measures, including a 50% tariff on U.S. goods. Other countries also faced adjustments, including Bangladesh (35%), Botswana (37%), and Indonesia (19%). Additionally, Japan’s tariff rate was reduced to 15%, though no official documentation has yet been published [1].

The EU saw a notable shift, with a preliminary agreement to reduce its reciprocal tariff rate from 30% to 15%, reflecting a more flexible and pragmatic diplomatic stance from the administration. The delayed implementation of these tariffs, set to take effect on August 1, 2025, suggests a strategic pause to allow for continued negotiations and assessments [1].

The legal landscape remains uncertain. On May 28, the Court of International Trade (CIT) issued a ruling enjoining the “fentanyl” and reciprocal tariffs. However, the U.S. government secured a stay from the Federal Circuit, ensuring these tariffs remain in force during the appeal process. The resolution of this legal challenge will significantly affect the timeline and enforcement scope of the policy [1].

Analysts highlight the administration’s use of executive orders as a strategic and flexible tool in trade policy. The rapid adjustment of tariffs allows for swift responses to trade imbalances and perceived unfair practices. However, the move also carries the risk of sparking retaliatory actions, potentially escalating trade tensions and increasing market volatility.

The recalibration of global trade dynamics is already evident, with countries affected by higher tariffs exploring avenues to negotiate favorable terms. The Trump administration maintains that the adjustments are designed to protect American industries and reduce trade deficits, consistent with the broader objectives of the “America First” trade policy [1].

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Source:

[1] [White House - Further Modifying the Reciprocal Tariff Rates](https://www.whitehouse.gov/presidential-actions/2025/07/further-modifying-the-reciprocal-tariff-rates/)

[2] [AP - Trump signs executive order to impose new tariffs on Brazil](https://apnews.com/live/donald-trump-news-updates-7-31-2025)

[3] [TipRanks - Trump Signs Executive Order Modifying Reciprocal Tariff Rates](https://www.tipranks.com/news/the-fly/trump-signs-executive-order-modifying-reciprocal-tariff-rates-thefly)