US proposes 25% tariff on Brazilian imports, citing unfair trade practices

The administration of U.S. President Donald Trump has proposed a new 25% tariff on imports from Brazil, citing unfair trade practices. U.S. Trade Representative Jamieson Greer announced the punitive tariff Monday evening, based on issues including digital trade and illegal deforestation.

The new tariff would be imposed under Section 301 of U.S. trade policy — a law that gives the U.S. government broad authority to impose trade sanctions for violations of trade agreements as well as what are considered “unfair” trade practices under the Trade Act of 1974.

Mr. Greer said the investigation began last July. The practices under investigation involve issues such as illegal deforestation, market access for ethanol, and anti-corruption enforcement, among other key issues, according to a summary released Tuesday by the U.S. Department of Commerce.

In a 107-page document, the U.S. government argues that trade practices between the two countries are “unreasonable and burden or restrict U.S. commerce,” also pointing to agreements between Brazil and Mexico and India. The document contends that these agreements “create incentives to shift production away from the U.S. because they create a financial advantage to export to Brazil from these countries, rather than exporting from the U.S.”

A public comment period on the proposed tariff will begin Thursday. Written comments are due by July 1, and a public hearing will be held in Washington on July 6.

Beef, coffee, rare earths, other metals, energy, and aircraft parts will be exempt from the tariff. On CNBC, Mr. Greer said further findings on unfair trade practices would be announced in the coming weeks to address what he called a “colossal” trade deficit.

However, data shows that the U.S. still maintains a trade surplus with Brazil. In March, Brazil purchased $3.3 billion worth of goods from the U.S., more than the $2.9 billion it exported, creating a $420 million trade surplus for the U.S.

Other countries under investigation include China and Vietnam. The new tariff will partially replace the 50% tariff on many Brazilian goods that Mr. Trump imposed last year, 40% of which was a penalty for Brazil’s prosecution of former President Jair Bolsonaro, a Trump ally.

The White House recently also reduced tariffs on some imports of aluminum, copper, and steel, including agricultural equipment such as harvesters. Those tariffs were cut from 25% to 15% and will expire in December 2027.

The new tariff decision comes after the Supreme Court in February rejected the use of the International Emergency Economic Powers Act (IEEPA) that the White House had used to impose broad global tariffs.

“These are the first of many new tariffs replacing IEEPA national security tariffs. The public comment period will allow for small adjustments and exemptions. Ultimately, this will add inflationary pressure compared to a few months ago, but not compared to the same period last year,” said Rachel Ziemba, a senior fellow at the Center for a New American Security, speaking to Al Jazeera.

These changes come despite a visit to Washington by President Luiz Inacio Lula da Silva last month, as bilateral relations have soured in recent months. The U.S. State Department has also designated two Brazilian criminal gangs as “terrorist organizations,” a move that bolsters the stance of Senator Flavio Bolsonaro — Lula’s main rival in the October election — despite objections from Brazilian officials.