US Imposes 25% Tariff on Certain Brazilian Imports

The US has announced that it will impose a 25% tariff on certain imports from Brazil, starting from 22 July.

The decision was made after a year-long investigation by the US Trade Representative’s (USTR) office, which concluded that Brazil had engaged in unfair trade practices.

The new tariff aims to address the trade imbalance and unfair trade practices between the US and Brazil, the world’s 10th largest economy.

However, some products that could have a direct impact on US supply chains have been exempted from the tariff. These include coffee, beef, oranges, orange juice, and certain types of oil and gas products, as well as aerospace industry parts.

Reasons Behind the Tariff

The USTR cited Brazil’s failure to implement anti-corruption measures, customs policies, and other trade practices as the reasons behind the tariff.

Despite this, public records show that the US has maintained a trade surplus with Brazil for a long time.

US Trade Representative’s Statement

US Trade Representative Jamison Greer stated that the additional tariff is necessary to provide a fair competitive environment for American workers and businesses.

Greer added that although bilateral talks over the past year have not resolved the disputed issues, the US is willing to continue negotiations with Brazil to address the necessary reforms.

Brazil’s Reaction

In June, when the tariff proposal was made public, Brazilian President Luiz Inacio Lula da Silva strongly opposed the move, calling it a politically motivated decision.

Lula linked the decision to the upcoming October elections and his political rival, Flavio Bolsonaro, who is the son of former President Jair Bolsonaro and had recently visited Washington.

US Secretary of State’s Comment

US Secretary of State Marco Rubio accused Lula’s government of not engaging in good-faith negotiations with the US and stated that Brazil’s economic policies do not serve the interests of citizens of both countries.

Legal Basis of the Tariff

The additional tariff is being imposed under Section 301 of the US Trade Act of 1974.

Previously, the US Supreme Court had ruled that some of the widespread tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) in 1977 were beyond the authority of the law.

In 2022, the Trump administration had imposed a 50% tariff on Brazil in response to the country’s presidential election, which was seen as a protest against former President Jair Bolsonaro.

However, after a meeting at the White House in May, there were signs of improvement in the relationship between Presidents Trump and Lula.