Washington DC [US], July 16 : The United States Trade Representative (USTR) announced a 25 per cent tariff on certain goods imported from Brazil under Section 301 of the Trade Act of 1974, following what it described as a year-long investigation into Brazil's trade practices.
The Brazilian government, headed by President Lula da Silva, hit back at the United States, describing the move as a "lamentable milestone" in bilateral relations and a violation of multilateral trade rules.
"Today, USTR is taking action under Section 301 of the Trade Act of 1974 by imposing a 25% tariff on certain goods of Brazil after extensive public hearings and comments as well as numerous negotiating rounds with Brazilian officials," US Trade Representative Jamieson Greer said on Thursday.
The action comes after the US concluded that several of Brazil's trade policies are "unreasonable and discriminatory," significantly hindering the competitive position of American businesses and workers.
The USTR probe determined that certain Brazilian measures related to digital trade and electronic payment services, unfair, preferential tariffs, anti-corruption interference, intellectual property protection, ethanol market access, and illegal deforestation are unreasonable and burden or restrict the commerce of American farmers, workers, innovators, and exporters.
The Office of the United States Trade Representative (USTR) convened two public hearings, received over 360 public comments, and negotiated intensively with the Brazilian government to seek resolution of US concerns, as per a statement by the USTR.
"The USTR initiated this investigation at the direction of President Trump in order to explore unfair trading practices by Brazil with respect to digital trade, electronic payment services, unfair preferential tariffs toward third countries, anti-corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation," Greer told reporters.
"Safeguarding American economic interests against unfair trade practices is the bedrock of President Trump's America First policies. Whether it is punishing US technology companies for refusing to censor political speech, backsliding on anti-corruption enforcement, or allowing Brazilian farmers to exploit illegally logged land to gain an advantage over American farmers, Brazil's unfair trading practices have prevented US workers and producers from accessing this important market with over 210 million consumers," said Greer.
The USTR action, said Greer, is necessary to address these unfair trade practices to ensure American workers and companies can compete on a level playing field.
"Extensive negotiations with Brazil over the past year have not resolved these issues, but we remain open to continuing negotiations with Brazil to bring about long-needed changes to the problems identified in this investigation," Greer said.
Section 301 of the Trade Act of 1974 grants the USTR the authority to investigate and respond to foreign government actions that are deemed unfair, provide subsidies, or violate trade agreements.
The US government maintained that while it remains open to further dialogue, the current measures are necessary to ensure that trade between the two nations remains "free, fair, and reciprocal."
"Today, President Trump directed USTR to impose a 25% tariff on most Brazilian imports. Let there be no confusion about why: President Lula and his government have not negotiated with the US in good faith," US Secretary of State Marco Rubio said.
In a post on X, Rubio stated Lula's "economic policies are bad for Americans and bad for Brazilians. For the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that."
In a strongly worded statement issued by the Social Communication Secretariat of the Presidency, Brazil "repudiated" the USTR decision to invoke Section 301 of the Trade Act of 1974.
The Lula administration argued that there is "no justification" for the unilateral measures, pointing out that the United States has enjoyed a massive trade surplus of USD 424.5 billion with Brazil over the last 15 years.
"Brazil does not recognize the legitimacy of investigations without support in the multilateral rules of trade," the presidency stated, adding that the country has acted "tirelessly" to provide evidence refuting U.S. allegations of unfair trade practices.
According to Greer, the investigation was launched to address longstanding US concerns regarding Brazil's trade policies, and despite several rounds of engagement between the two governments, Washington concluded that responsive action was necessary under Section 301.
The tariffs are expected to affect thousands of Brazilian export products, although several key commodities have reportedly been exempted. Products such as beef, coffee, rare earths and aircraft parts are among the exemptions.