If you import coffee, orange juice, beef or specialty metals from Brazil, your landed cost has just jumped by 50% overnight — or, if your product is on the right list, not at all. On July 30, a new Executive Order under the International Emergency Economic Powers Act (IEEPA) added a 40% tariff on Brazilian goods on top of an existing 10% reciprocal tariff, totaling 50% additional duty above the normal MFN rate starting at 12:01 a.m. EDT on August 6. The difference between a product that is in and a product that is out all comes down to a single annex, a carve-out for goods already subject to Section 232, and how your shipment was admitted to a Foreign Trade Zone.
For a small roaster buying 20 bags of green coffee a month, a taqueria chain sourcing Brazilian beef trim, or a machine shop buying pig iron and silicon metal, that annex is not a footnote. It decides whether you need to reprice your menu, renegotiate a purchase order, or simply confirm with your broker that your HTS code is on the exclusion list. Here’s how to read the order, where the exclusions really are, and how to get your books to reflect the new reality without overstating inventory or missing a drawback.
What just changed and when it hits
The order is simple in structure but layered in execution:
The math: 40% + 10% = 50% above MFN. The 10% reciprocal tariff on most countries has been in place since early 2025. The July 30 action adds another 40% specifically for Brazil, citing the Brazilian government’s trade policies. The result is a total of 50% in additional duties stacked on top of whatever normal Column 1 (MFN) rate your product already paid. A product that was duty-free before now pays 50%. A product that was at 3% before now pays 53%.
Effective time: 12:01 a.m. EDT on August 6, entered for consumption or withdrawn from warehouse for consumption. The trigger is entry, not sailing date. Goods entered on August 5 are at the old rate. The same container entered on August 6 is not — unless it qualifies for a transit exception.
Transit exception: loaded before August 6 and entered by October 5. If your goods were loaded onto the vessel at origin (lading on a through bill) before 12:01 a.m. EDT on August 6 and are entered for consumption before 12:01 a.m. EDT on October 5, they are exempt from the new 40% addition. Keep the bill of lading date and the entry summary together. Brokers are asking for both documents before claiming the exception.
Statutory exceptions under 50 U.S.C. 1702(b). The order repeats the standard IEEPA limitations: personal communications that do not transfer anything of value, humanitarian donations of food, clothing, and medicine, informational materials (publications, films, photographs, artwork), and personal travel baggage. These are narrow and rarely apply to commercial import entries, but they are in the text.
FTZ treatment matters. Goods entering a Foreign Trade Zone after August 6 must be admitted under “privileged foreign” status unless they qualify for “domestic status,” in which case the new tariff does not apply. In practice, you cannot bring Brazilian goods into an FTZ as non-privileged and wait for the policy to turn around. If you use an FTZ, tell your operator on August 6 that Brazilian entries are privileged foreign unless you have a transformation that qualifies for domestic status.
Duty drawback is still allowed. Importantly, the order does not suspend drawback. If you import Brazilian inputs, pay the 50% additional duty, then export finished goods or destroy goods under drawback rules, you can still claim drawback on the duties paid, subject to the usual time limits and documentation.
Adjustments are built in. The order says tariffs can increase if Brazil retaliates or decrease if Brazil addresses the cited concerns. It also has a standard severability clause. Don’t build a pricing model that assumes 50% is forever.
Which products are actually excluded (and which are not)
This is where most small importers either save a lot of money or make a costly assumption. There are two separate exclusion buckets, and they are not the same.
Annex I: Products not subject to the new 40%
The Executive Order includes an Annex I list of roughly 690 tariff lines that are exempt from the additional Brazil 40%. You’ll need the annex with your broker to check your specific 8- or 10-digit HTS, but the headline categories of goods that are out include:
- Silicon metal and pig iron
- Civil aircraft, aircraft engines, and certain aircraft parts (think the Embraer supply chain)
- Brazil nuts
- Orange juice (from concentrate and not-from-concentrate, heading 2009.11 and 2009.12) and certain other processed citrus
- Selected energy products (including some crude and fuel categories) and certain wood pulp and paper goods
For a specialty food importer, the distinction is stark: orange juice and Brazil nuts are out, so a container of Brazilian orange juice entered on August 20 would NOT pay the extra 40% (it still pays the existing 10% reciprocal and normal MFN). Green coffee (0901.11 or 0901.12), however, is not on Annex I. If you roast Brazilian specialty coffee, that cost increase hits in full.
Beef is the same story. Most fresh, chilled, and frozen beef from Brazil (0201, 0202) is not on Annex I and is therefore subject to the full additional duty. If you buy Brazilian beef trim for a restaurant group, your per-pound cost just moved.
Section 232 carve-out — Products already paying their own tariff
A separate exclusion says goods already covered by Section 232 tariffs are not hit twice by this Brazil action:
- Steel and downstream steel products (Section 232, currently subject to duty)
- Aluminum and aluminum downstream products (Section 232)
- Automobiles and auto parts (Section 232)
If you import Brazilian steel slab or aluminum, you are already paying Section 232 duties on those entries. The order excludes them from the Brazil IEEPA addition, so you do not pay 50% plus another 50%. That is not a free pass — you still pay the Section 232 duty — but it prevents a 100% stack. Keep your entry paperwork clear on which authority is being assessed. The CBP will expect you to show the correct case number and the appropriate Chapter 99 subheading for the specific exclusion you claim.
A common mistake is assuming steel is now duty-free from Brazil because it is excluded from the Brazil order. It is not. A hot-rolled coil from Brazil entered on August 10 still pays the Section 232 steel duty. The exclusion simply avoids the duplicate duty.
Why your bookkeeping can’t wait for the broker’s statement
Brokers collect and remit duties, but your books determine your margin, your inventory value, and your tax timing. Getting the tariff onto the ledger correctly matters as much as getting the rate right.
Consider a roaster with a standing PO for &40,000.00 of green coffee (CIF value) loaded August 3 and entered August 12. Under the transit rule, that shipment is exempt from the new 40%. The roaster’s next PO, loaded August 9 at the same value and entered August 18, is not. The first shipment’s landed cost is roughly 40,000 + same costs + an additional 16,000 is not a minor variance to fix at quarter end. It’s a 40% cost increase that needs to be in inventory or in direct expenses immediately, depending on when you take title.
If you wait for your monthly broker statement to post the duty, your inventory will be overstated or understated for weeks, your menu pricing stays stale, and your August gross margin report shows a story that never existed.
A Practical Checklist for the Small Importer
Think of this as a one-week sprint with your broker, your 3PL, and your bookkeeper.
1. Audit every open PO with Brazil as origin.
Create a simple spreadsheet: PO number, supplier, product description, 8-digit HTS, CIF value, estimated date of loading, estimated date of entry, Annex I / Section 232 status, and projected additional duty. Sort by entry date, not order date. Anything entering on or after August 6 is in scope unless exempt.
Also, your bookkeeper should tag these orders in the accounting system so you can trace which inventory lots carry the added duty.
2. Confirm each HTS against Annex I and Section 232 in writing.
Do not self‑classify exclusions from a news summary. Send your broker the list: “0901.11.00 — green coffee, not roasted, not decaffeinated — Annex I? — Section 232?”. Have the broker confirm each HTS in an email you keep on file.
Remember: exclusions are line‑item‑specific. A container with three HTS lines — orange juice (excluded via Annex I), green coffee (not excluded), and steel fittings (excluded via Section 232) — must show a different Chapter 99 number on each line, and the duty calculation will be different per line.
3. Lock the transit‑exception paperwork now.
For any shipment loaded before August 6 and expected to arrive by October 1, collect: the bill of lading showing the on‑board date, the commercial invoice, the packing list, and any draft entry summary. Put them in one PDF per shipment, and save them. If customs authorities call you in two months, you will not need to be digging through old emails.
4. Decide on your FTZ processing status before the next admission.
If you use a Foreign Trade Zone, confirm with your zone operator: all Brazil‑origin admissions after August 6 are immediately classified as "privileged foreign" unless you will transform the goods into a product that qualifies for domestic‑tariff status. Update your admission template so the operator does not have to ask you each time.
5. Rework your landed cost per SKU before you reprice.
Add a “tariff surcharge” line to your landed cost abstract. For a SKU that used to be 0.20 cargo insurance and $0.10 port charges:
- Pre‑August 6 landed base: 0.30 freight + 1.05 at 10% reciprocal) + 12.10
- Post‑August 6, not excluded: 0.30 + 1.05 (10%) + 0.70 elsewhere.
That is a 40% increase in landed cost alone. Your gross margin model should show both scenarios, so you can see whether a price increase, a pack‑size change, a blend change, or a switch to Colombia or Ethiopia actually restores your margin.
6. Accrue the tariff on the right day.
The tariff is owed when the goods are entered with CBP, even if you take title at the port. That creates a mismatch: you owe your supplier now (if you pay with the order), but CBP charges later. Keep the PO valued in a prepaid or in‑transit inventory account, and create a separate “tariff payable” account you only post when CBP entry occurs.
A plain‑text workflow, if you use it for auditability:
2026-08-12 * "PO-1045 - Green Coffee (Brazil) - entered Aug 12"
Assets:Inventory:InTransit 40,000.00 USD
Assets:Checking -40,000.00 USD
2026-08-12 * "CBP entry 999-012-001 - Additional 50% IEEPA on coffee"
Expenses:COGS:Duties:BrazilRate 16,000.00 USD
Liabilities:CustomsDutiesPayable -16,000.00 USD
; HTS 0901.11.00, CIF 40,000, 40% additional, not Annex IIf the goods are still in your warehouse and not yet sold, capitalize the tariff into the inventory account, not to COGS. The entry itself from the same template, but you debit Inventory, not COGS.
7. Track drawback claim filings from day one.
If you re‑export finished goods that contain Brazilian inputs, set up a drawback claim tracker the day you pay the duty. Each export that qualifies should generate a claim for the recoverable duty, supported by manufacturing records, export bills, and entry numbers. This can take months, but a receivable on your books reminds you to file it and prevents the money from melting into the general account.
8. Keep records for 3 years, not 3 weeks.
CBP can audit classification and exclusion claims for up to 5 years after the fact. Store the Annex I printout, the written confirmation from your broker on each HTS, the bill of lading, the CBP Form 7501, and FTZ admission documents together — per entry number. A small importer who can produce a single PDF in minutes will have a very different audit than the one who has to reconstruct it from three email boxes.
How to Talk to Customers and Suppliers Without Overpromising
The order explicitly says it can go both ways. Do not write “50% is forever,” and do not tell a supplier you are permanently changing origin. A more constructive conversation: “The United States has added a 40% duty on most Brazilian imports, starting August 6, on top of the existing 10% – that brings it to 50% above the normal MFN rate. However, orange juice, Brazil nuts, pig iron, and a few other items are excluded under Annex I; steel and aluminum are also excluded from the Brazil‑specific duty because they already have Section 232 duties. Coffee and beef are not excluded. Let’s check with our broker to confirm the exact date and the treatment of your shipment — if it was loaded before August 6 and enters before October 5, it may still qualify for the pre‑order rate.”
That language is precise, limited, and gives you room for dynamic changes if conditions change or the U.S. and Brazil negotiate a carve‑out.
Simplifying Your Financial Management
As you rebuild landed costs, re-evaluation pricing, and re‑invent inventory records around the Brazil tariff, having clear, backed records is what keeps a good sourcing decision from turning into a reporting nightmare. Beancount.io provides plain‑text accounting. Stay true to the simple and honest: you still have full ownership for your financial life — nothing hidden. Get started for free and see why or why not — but you do have the choice to take the plain‑text path.