[Source: Reuters]
The U.S. will hit Brazil with new 25% duties on its furniture, ethanol, machinery, footwear, sugar and other goods, launching a new wave of tariffs that could affect dozens of countries as President Donald Trump’s administration seeks to rebuild its leverage on major trading partners after legal setbacks.
The late-night announcement by U.S. Trade Representative Jamieson Greer made Brazil the first country targeted under Trump’s new tariff strategy, which relies on Section 301 of the Trade Act of 1974, an unfair trade practices statute.
Trump’s previous global tariffs under an emergency law, including duties of up to 50% on Brazilian goods, were struck down by the U.S. Supreme Court in February.
The new tariffs are scheduled to take effect on July 22, two days before Trump’s temporary 10% global tariff is scheduled to expire. The final order maintained exemptions for Brazilian beef, coffee, aircraft and other goods but expanded that list.
Tariffs from other Section 301 probes are expected to eventually ensnare major U.S. trade partners including India, China, Japan, South Korea and the European Union as Trump seeks a trade reset after the U.S. Supreme Court struck down a previous round of global levies.
Wednesday’s announcement by the USTR office follows months of fruitless negotiations between U.S. and Brazilian officials after the Trump administration proposed new tariffs in June, saying Brazil’s practices were unfair on a range of issues from digital trade to illegal deforestation.
“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,” U.S. Trade Representative Jamieson Greer said in a statement.
Brazilian President Luiz Inacio Lula da Silva, who is expected to run for reelection in October, said the U.S. decision lacks justification.
Brazilian officials have long suggested, in private conversations, that the motives for the new tariffs were political, making negotiations fruitless.
Brazil would immediately begin proceedings to invoke instruments provided for under the “Reciprocity Law” and revisit the matter within the framework of the WTO dispute settlement mechanism, he said in a statement.
The new levies are likely to alarm U.S. trading partners around the world, including India, which has struggled to sign a trade deal with Washington at least partly because of the Section 301 investigations into lax enforcement of forced labor bans and excess industrial capacity.
