WASHINGTON – The Trump administration has formally proposed a 25% tariff on imports from Brazil, asserting that the world’s tenth-largest economy engages in “unreasonable” trade practices that “burden or restrict U.S. commerce.” This significant announcement, made late Monday, follows an extensive investigation initiated by the Office of the U.S. Trade Representative (USTR) under Section 301 of the Trade Act of 1974.
USTR Investigation Cites Unfair Practices
The USTR’s investigation concluded that Brazil’s trade conduct includes lax anti-corruption enforcement and the imposition of its own unfair tariffs, among other identified concerns. U.S. Trade Representative Jamieson Greer stated that while he and President Donald Trump had engaged in “constructive” meetings with Brazilian President Luiz Inácio Lula da Silva and other officials, “we continue to have substantial differences in resolving the issues identified in this investigation.” The proposed tariffs aim to address these persistent disputes.
In adherence to procedural requirements, Greer’s office has scheduled a public hearing for July 6. This hearing will provide an opportunity for U.S. businesses and other interested parties to present their perspectives and potential economic impacts. Notably, trade lawyer Ryan Majerus, a partner at King & Spalding, highlighted that the administration’s plan is not all-encompassing; it strategically excludes over half of current U.S. imports from Brazil, specifically mentioning critical categories such as aircraft and key minerals. This selective application suggests a targeted approach.
Legal Framework and Precedent
The administration’s decision to invoke Section 301 of the Trade Act of 1974 is deliberate, as this legal authority has a history of surviving challenges, providing a robust foundation for the proposed duties. This contrasts sharply with a prior action taken by the Trump administration last year, when it imposed a 50% tariff on Brazil. That earlier tariff, largely a protest against Brazil’s prosecution of former president Jair Bolsonaro for his attempts to overturn his 2022 electoral defeat, was implemented under the International Emergency Economic Powers Act (IEEPA) of 1977.
However, the U.S. Supreme Court ruled in February that President Trump had “overstepped his authority” by using IEEPA to impose sweeping tariffs on U.S. trading partners, including the one targeting Brazil. The current reliance on Section 301 therefore indicates a strategic shift to an authority that has proven more resilient in court, likely enabling the administration to impose other tariffs and recoup tax revenue lost following the Supreme Court’s rejection of the IEEPA tariffs.
The proposed 25% tariffs on Brazil underscore a persistent effort by the Trump administration to reshape global trade relationships, prioritizing what it defines as fair and reciprocal practices. The upcoming public hearing on July 6 will be a critical juncture in determining the final scope and implementation of these new duties, with potential ripple effects across various sectors of both the U.S. and Brazilian economies.
