The 12.5% U.S. tariff on all Brazilian products took effect today, just days after the White House imposed a 25% tariff on a variety of exports from the South American country.
Washington has accused Brazil of failing to properly enforce unfair trade practices and “forced labor” standards against U.S. companies.
The 25% tariff targets goods including furniture, ethanol, machinery, shoes and sugar, while the 12.5% levy is universal and applies to 59 other countries.
After a year-long investigation, the Office of the US Trade Representative concluded that Brazil had a variety of trade practices it deemed unfair, including lax anti-corruption enforcement and questionable individual tariffs.
The United States and Brazil have maintained a goods trade surplus for years, but U.S. Trade Representative Jamieson Greer said in a statement last week that the move was necessary to ensure American workers and businesses can compete on a level playing field.
“While extensive negotiations with Brazil over the past year have not resolved these issues, we remain willing to continue ongoing negotiations with Brazil to bring about long-needed changes to the issues identified in this investigation,” he said.
The tariffs stemmed from an investigation initiated under Section 301 of the Trade Act of 1974. The law authorizes the United States to investigate and respond to foreign trade practices it determines are unfair or harmful to its commerce.
Brazil is also involved in a separate Section 301 investigation by USTR into allegations of forced labor in supply chains in 60 countries, which resulted in an additional tariff of 12.5%, raising Brazil’s tariff burden on certain products to 37.5%.
The order exempts some goods that officials fear would disrupt the supply chain, including coffee, beef, oranges, orange juice, some oil and gas energy products, and aerospace parts that are not produced in the United States.
Secretary of State Marco Rubio defended the move, saying President Luiz Inácio Lula da Silva “did not negotiate with the United States in good faith” and that his policies were “bad for both Americans and the Brazilian people.”
A few months ago, the International Emergency Economic Powers Act (IEEPA) aimed to impose 50% tariffs on Brazil in connection with President Trump’s indictment of Brazil’s former President Jair Bolsonaro, but was blocked after the U.S. Supreme Court ruled that the administration had exceeded its authority under the law.
After U.S. officials warned of new tariffs in early June, Brazilian President Lula da Silva said the move was political and criticized his rival in October’s election, Senator Flavio Bolsonaro. Senator Flavio Bolsonaro recently visited Washington and his father, former President Jair Bolsonaro, was an ally of President Donald Trump.
Less than 24 hours after the tariffs were imposed, Bolsonaro wrote on his
In Brazil, the media, authorities and politicians are calling the Donald Trump administration’s tax policy ‘tarifaço’, or massive tariff hikes.
Bolsonaro also said he had “complete confidence” that he would be able to overturn the tariffs if he was elected Brazil’s president in October’s election, calling the PT “the party of the tariff war.”
PT announced that it would launch the ‘Brazil Does Not Give Up’ campaign in response to the US tariffs, and in a statement accused the Bolsonaro family of encouraging the move.
“The U.S. attack on the Brazilian economy, encouraged by the Bolsonaro family, shows that there are people who are willing to put their political and personal interests ahead of the national interest,” the statement said.
Lula also said the campaign will run on social media, including content advocating the importance of the Pix electronic payment system, national industries, rare earths and Brazil’s strategic mineral resources.
“We will talk directly with the people about the impact of the attacks on Brazil’s economy and reaffirm our core message: Brazil has its own destiny and it does not accept anyone deciding its future for it,” he added.
Featured image caption: Bulk vegetable exports from the port of Santos, Brazil.
Featured Image Source: Sabino Freitas Correa via Wikimedia Commons
