Exactly one year ago today, on April 2, 2025, President Donald Trump signed Executive Order 14257 in the White House Rose Garden. Invoking the International Emergency Economic Powers Act (IEEPA), the order imposed a 10% baseline tariff on nearly all imports into the United States, with rates of 20-25% on Canada and Mexico, and significantly higher rates on 57 other countries. Trump called it "Liberation Day," framing the tariffs as a tool to rebalance global trade and revive American manufacturing.
Twelve months later, the tariffs have been struck down by the Supreme Court, over $166 billion collected from businesses is now eligible for refunds, the US trade deficit grew instead of shrinking, and Brazil has emerged as one of the clearest beneficiaries of the disruption.
This is the full timeline of what happened, and what it means for investors across Latin America.
What Liberation Day actually did
The scope of Executive Order 14257 was sweeping. It applied tariffs to goods from virtually every trading partner, using IEEPA, a law originally designed for genuine national security emergencies like the Iran hostage crisis and post-9/11 asset freezes.
| Target | Tariff rate |
|---|---|
| Baseline (most countries) | 10% |
| Canada and Mexico | 25% |
| China | Up to 145% (cumulative) |
| 57 additional countries | 20-50% |
The immediate market reaction was severe. On April 3 and 4, 2025, US stock markets lost approximately $6.6 trillion in value. The S&P 500 dropped over 10% in two days. Global markets followed. The VIX volatility index spiked above 45.
Trump paused the highest tariffs on most countries within a week, keeping only the 10% baseline and the elevated China rates. Markets partially recovered on the pause, but the damage to trade relationships was already underway.
The year that followed: promises versus reality
The stated goal of Liberation Day was to reduce the US trade deficit, bring manufacturing jobs home, and generate revenue. One year of data tells a different story.
The trade deficit grew. Rather than shrinking, the US trade deficit widened through 2025 and into 2026. Importers rushed to front-load purchases before tariffs took effect, then faced higher costs that were largely passed through to consumers. The structural factors driving the deficit, primarily strong US demand for foreign goods and the dollar's reserve currency status, were untouched by tariffs.
Manufacturing jobs declined. Between April 2025 and February 2026, the US lost approximately 89,000 to 100,000 manufacturing jobs. The tariffs raised input costs for American manufacturers who depend on imported materials, making them less competitive rather than more. Companies that were supposed to benefit from protection instead faced supply chain disruptions and retaliatory tariffs from trading partners.
Consumer prices rose. Independent estimates projected that the tariffs, if fully sustained, would have cost the average American household between $1,900 and $3,800 per year in higher prices. Retailers, automakers, and electronics companies all reported margin compression.
Agricultural exports collapsed. This was perhaps the most dramatic shift. US soybean exports to China went from approximately 72,000 tons per week before Liberation Day to just 1,800 tons per week afterward. Chinese buyers, facing retaliatory dynamics and looking for alternatives, found that US soybeans had become roughly 20% more expensive than Brazilian soybeans. The agricultural trade deficit increased by 10.8%.
Had the tariffs remained fully in place, the Congressional Budget Office estimated US GDP would have contracted by 0.3%.
The Supreme Court ruling
On February 20, 2026, the Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that IEEPA does not authorize the president to impose tariffs. Chief Justice John Roberts, writing for the majority, stated plainly: "We hold that IEEPA does not authorize the president to impose tariffs."
The ruling was decisive. It found that tariff authority belongs to Congress under the Commerce Clause, and that IEEPA's emergency powers were never intended to encompass trade policy of this scale.
The practical impact was immediate. Tariff rates imposed under IEEPA were invalidated. Markets surged on the news. The S&P 500 gained over 3% in a single session, and emerging market currencies, including the Brazilian real, strengthened significantly.
Warning
Steel and aluminum tariffs imposed under Section 232 (national security) were not affected by this ruling and remain in effect at rates up to 50%.
The $166 billion refund problem
Here is where the story gets complicated. Between April 2025 and February 2026, US Customs and Border Protection (CBP) collected approximately $166 billion from over 330,000 businesses across roughly 53 million individual import entries. With the tariffs ruled unconstitutional, that money is now eligible for refunds.
The scale of the refund challenge is staggering. CBP has publicly acknowledged that manually processing 53 million entries is "nearly impossible" with existing systems. There is no automated mechanism to reverse tariff collections of this magnitude. Businesses that paid the tariffs, many of them small and medium importers, face months or potentially years of waiting.
The fiscal implications are equally significant. Analysts estimate the refund obligation, combined with the loss of ongoing tariff revenue, could add approximately $2 trillion to US deficits over the coming decade. This creates pressure on US fiscal policy and bond markets that investors should monitor.
For businesses, the refund chaos means continued cash flow strain. Many companies borrowed to pay the tariffs. They now hold receivables from the government with no clear timeline for recovery.
How Brazil benefited
While the tariffs disrupted US trade relationships, Brazil was positioned to absorb redirected demand, and it did.
Soybeans. The most visible shift. When Chinese buyers abandoned US soybeans due to cost and retaliatory dynamics, they turned to Brazil. Brazilian soybeans were approximately 20% cheaper than American soybeans after tariffs. This wasn't a temporary substitution. Chinese agricultural purchasing patterns have restructured around Brazilian supply, and these relationships are unlikely to fully reverse even with tariffs removed.
Bilateral trade. Brazil-China trade hit a record $171 billion during this period. China is now firmly Brazil's largest trading partner by a wide margin, and the tariff disruption accelerated a diversification that was already underway.
Record exports. Brazil closed 2025 with US$348.3 billion in total exports, the highest in recorded history. The industrial sector proved surprisingly adaptable, finding alternative buyers across Asia and the Middle East when traditional routes were disrupted.
| Indicator | Before Liberation Day | After Liberation Day |
|---|---|---|
| US soybean exports to China | ~72,000 tons/week | ~1,800 tons/week |
| Brazil-China bilateral trade | Growing | $171B record |
| Brazilian soybean price vs. US | Competitive | ~20% cheaper |
| Brazil total exports (2025) | - | US$348.3B (record) |
What this means for Latin American investors
The Liberation Day episode offers several concrete lessons.
Political risk is real and measurable. A single executive order reshaped global trade flows, destroyed billions in market value, and redirected agricultural supply chains that had been stable for decades. Investors who treated US trade policy as background noise lost money. Those who recognized the risk early, or were positioned in beneficiary markets like Brazil, captured significant upside.
Diversification works across geographies. Portfolios concentrated in US equities suffered the April 2025 crash and then faced months of policy uncertainty. Investors with exposure to Brazilian commodities, emerging market currencies, and non-US supply chains saw those positions benefit directly from the disruption.
Volatility creates opportunity. The period between April 2025 and February 2026 produced extreme volatility across equities, currencies, commodities, and fixed income. Markets moved sharply on each tariff announcement, pause, escalation, and court ruling. For active traders, this environment generated opportunities that don't exist in calm markets.
Trade policy reshapes supply chains permanently. Even though the tariffs were struck down after less than a year, the supply chain shifts they triggered are not easily reversed. Chinese buyers who moved to Brazilian soybeans have signed long-term contracts. Manufacturers who diversified away from US suppliers have built new relationships. The post-Liberation Day trade map will not simply revert to the pre-Liberation Day version.
Court rulings move markets. The February 2026 Supreme Court decision produced one of the sharpest single-day rallies of the year. Investors who understand the legal landscape, not just the economic data, have an edge in anticipating these moves.
Looking ahead
One year after Liberation Day, the tariffs are gone but their effects linger. The $166 billion refund process will take years. US-China trade relations remain fundamentally altered. Brazil's position as a primary commodity supplier to Asia has been reinforced. And the legal precedent set by Learning Resources v. Trump will constrain future presidential trade action.
For investors, the lesson is straightforward: geopolitical events are not abstractions. They move prices, redirect capital, and create measurable winners and losers. Staying informed about trade policy, court rulings, and supply chain dynamics is not optional. It is part of managing risk and identifying opportunity.
At Royal Binary, our trading team monitors global market events, from trade policy shifts to central bank decisions, as part of daily operations. If you want to understand how professional traders navigate volatile markets, explore our platform.