Amid recent Trump administration threats of tariff increases on imports from Brazil for other reasons, the Office of the U.S. Trade Representative initiated July 15 an investigation that could ultimately result in Section 301 tariffs on Brazilian goods in response to what USTR Jamieson Greer called “Brazil’s attacks on American social media companies as well as other unfair trading practices that harm American companies, workers, farmers, and technology innovators.”
USTR states that this investigation relates to the following trading practices (more details can be found here).
Digital trade and electronic payment services: Brazil may undermine the competitiveness of U.S. companies engaged in these sectors; e.g., by retaliating against them for failing to censor political speech or restricting their ability to provide services in Brazil.
Tariffs: Brazil accords lower, preferential tariff rates to the exports of certain globally competitive trade partners, thereby disadvantaging U.S. exports.
Anti-corruption: Brazil’s failure to enforce anti-corruption and transparency measures raises concerns in relation to norms relating to fighting bribery and corruption.
IPR: Brazil apparently denies adequate and effective protection and enforcement of intellectual property rights, harming U.S. workers whose livelihoods are tied to the U.S.’ innovation- and creativity-driven sectors.
Ethanol: Brazil has “walked away from its willingness” to provide virtually duty-free treatment for U.S. ethanol and instead now applies a substantially higher tariff.
Deforestation: Brazil appears to be failing to effectively enforce laws and regulations designed to stop illegal deforestation, thereby undermining the competitiveness of U.S. producers of timber and agricultural products.
USTR will hold a hearing in connection with this investigation on Sept. 3. Written comments and requests to appear at the hearing are due by Aug. 18. USTR has also requested consultations with Brazil.
If USTR determines that any of the acts, policies, or practices under investigation are actionable under Section 301 it will determine whether and what action to take in response. Any such measures could include higher tariffs on imports from Brazil that would be separate from any others the U.S. may impose under the International Emergency Economic Powers Act, Section 232, or other laws.
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