On July 30th, the President of the United States issued an executive order imposing an additional 40% tariff on imports of certain products from Brazil. These tariffs will be applied in addition to existing duties, including the 10% tariff introduced earlier this year.
The executive order exempts products subject to tariffs under Section 232 of the Trade Act (including aluminum and steel), and those listed in Annex I, covering more than seven hundred items.
While the official justification refers to a trade balance deficit, the measure appears to be influenced by political motivations and tariff asymmetries, reinforcing the strategic use of trade barriers in U.S. foreign policy.
A few days earlier, on July 15th, an investigation was initiated under Section 301 of the Trade Act. This provision allows the Office of the United States Trade Representative (USTR) to examine practices deemed harmful to U.S. commerce or discriminatory against American companies, potentially leading to the imposition of unilateral trade sanctions.
The investigation stands out for the breadth and heterogeneity of the topics covered. In addition to goods, it encompasses digital trade, the Pix instant payment system, intellectual property, ethanol, anti-corruption legislation, and environmental policies.
Unlike the World Trade Organization (WTO) dispute settlement system, the Section 301 procedures are unilateral and domestic. The US has used this method in the past, including against Brazil.
A public hearing is scheduled for early September, where representatives from affected sectors will gather. The investigative process may take up to a year, and its findings will guide the next phase of U.S. trade policy toward Brazil.
If the USTR’s final report is unfavorable to Brazil, new sanctions could be imposed. These might include additional tariffs on Brazilian products, restrictions on Brazilian imports, the suspension of trade benefits, and even limitations on access to U.S. services.
Although the announced tariffs apply only to goods, broader measures cannot be ruled out, which could affect specific sectors such as financial services related to Pix, which have already faced resistance from U.S. credit card operators.
Currently, Brazilian exporters are advised to review their contracts with American clients to mitigate potential impacts arising from the current situation. LBM Advogados will continue to closely monitor developments in this scenario and their impacts on Brazilian foreign trade.
LBM Advogados will continue to closely monitor developments in this scenario and their impacts on Brazilian foreign trade.