US to impose tariffs on Brazilian imports
The United States will implement a 25% tariff on most imports from Brazil starting July 22, marking the first action under the Trump administration’s new tariff strategy, reports BritPanorama.
This new programme follows a U.S. Supreme Court decision that dismantled the central elements of the previous tariff system earlier this year. It stems from investigations into unfair trade practices under Section 301 of the U.S. Trade Act.
Nearly 80 trade investigations have been initiated by the U.S. Trade Representative (USTR) office, with potential tariffs looming for various countries, including China, the European Union, India, Japan, South Korea, and Mexico.
Wednesday’s announcement followed a proposal made in June by the Trump administration to impose a 25% punitive tariff on numerous imports from Brazil, citing unfair practices pertaining to issues like digital trade and illegal deforestation.
U.S. Trade Representative Jamieson Greer noted, “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.”
In response, Brazilian President Luiz Inacio Lula da Silva criticized the U.S. decision as unjustified. He stated that Brazil would initiate proceedings under the “Reciprocity Law” and consider addressing the situation through the WTO dispute settlement mechanism.
U.S. Secretary of State Marco Rubio, accused by Lula of acting against Latin American interests when the tariffs were first proposed, placed blame on the Brazilian leader. “Lula and his government have not negotiated with the US in good faith,” Rubio asserted. He added, “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.”
The tariffs will target thousands of Brazilian products, including sugar, agricultural machinery, apparel, electrical machinery, paper, and steel. The U.S. has stated that all products originally proposed for exemption in the June notice would continue to be exempt, with exceptions for specific items such as high-purity dissolving pulp and non-pharmaceutical applications of certain products.
The exemptions cover items like beef, coffee, rare earths, energy products, aircraft, and aircraft parts, with additional products such as organic honey and pig iron also added to the exempt list.
The year-long investigation into Brazil highlighted various allegations, including legal issues with deforestation and the country’s instant payment system, Pix, which the U.S. claims undermines credit card companies. Brazil has strongly denied these allegations.
Additionally, Brazil is under a separate Section 301 investigation by the USTR concerning connections to forced labour within the supply chains of numerous countries, with results expected by July 24. This probe could result in an additional 12.5% tariff, raising the overall burden on Brazilian products to 37.5%.
The situation underscores the complexities of international trade relations, with the upcoming months poised to reveal further developments.
