How Trump's Brazil tariffs risk reversing the great China exit

A new 25 percent US tariff took effect on Wednesday, impacting a range of Brazilian goods and directly affecting the American apparel and footwear industry. Announced by President Donald Trump on July 15, the tariff has drawn criticism from industry leaders, warning the levy will raise costs for US companies.

"The Administration's tariff strategy continues to take a broad, one-size-fits-all approach that leaves our industry that supports 3.6 million American workers caught in the crosshairs,” AAFA President and CEO Steve Lamar told FashionUnited. “The newly announced tariffs on Brazil will make it more expensive for U.S. companies to work with long-standing sourcing partners, while doing little to support investment, growth, or expansion here at home.”

The tariff was imposed under the Trump administration's new strategy of using the Trade Act of 1974 to investigate what it considers unfair trade practices, and marks the first major country-specific Section 301 tariff measure issued following the invalidation of the administration’s IEEPA-based tariffs in February 2026.

The great China exit

Lamar points out that the new measure will likely reverse hard-won efforts to shift sourcing away from China. In recent years, US companies have moved their manufacturing and material sourcing to different countries due to geopolitical trade tensions. In 2025, China's share of US footwear imports fell to the smallest volume since 1992, according to the Footwear Distributors and Retailers Association (FDRA).

“Many companies successfully diversified sourcing away from China and increased investment in countries like Brazil to strengthen supply chain resilience. These tariffs risk undermining that progress. At a time when tariff threats continue across many of our key trading partners, businesses lack the certainty needed to make long-term sourcing and investment decisions,” Lamar said.

Brazil is the largest footwear manufacturer and exporter in the Western Hemisphere and one of the five largest producers in the world, according to FDRA. The US buys one in every five shoes exported from Brazil, as reported by the Brazilian Footwear Industries Association (Abicalçados). In 2025, US companies paid nearly 61 million dollars in tariffs on 5.66 million pairs of Brazilian leather footwear imports, per the American Apparel and Footwear Association (AAFA).

Lamar said the Trump administration should pursue “trade policies and agreements that reflect the specific needs of American industries and provide a more strategic, predictable path forward,” instead of “forcing companies to navigate constant disruption.”

“Congress, which has primacy in US tariff policy, needs to play a leading role in the formulation of this approach to ensure it is durable,” he said.

United States Trade Representative (USTR) defended the tariff against Brazil as necessary. "Today's action is necessary to address these unfair trade practices to ensure American workers and companies can compete on a level playing field," ambassador Jamieson Greer said in a statement.