AsianFin -- The Trump administration is taking further steps toward hefty tariffs on Brazil after the threat issued through a letter last week.
Credit：U.S. Chamber of Commerce
The Office of the U.S. Trade Representative (USTR) announced on Tuesday it initiated an investigation of Brazil under Section 301 of the Trade Act of 1974.
The investigation aims to “seek to determine whether acts, policies, and practices of the Government of Brazil related to digital trade and electronic payment services; unfair, preferential tariffs; anti-corruption interference; intellectual property protection; ethanol market access; and illegal deforestation are unreasonable or discriminatory and burden or restrict U.S. commerce,” according to a statement of the USTR.
U.S. Trade Representative Jamieson Greer in the statement said the probe, under President Donald Trump’s direction, will look into “Brazil’s attacks on American social media companies as well as other unfair trading practices that harm American companies, workers, farmers, and technology innovators.”
Greer said he has determined that Brazil's tariff and non-tariff barriers "merit a thorough investigation, and potentially, responsive action" after consulting with other government agencies, cleared advisers and Congress.
Trump on July 9 threatened new reciprocal tariffs of 50% on all Brazilian imports, starting on August 1. Brazil became the big loser as the tariff rate of 50% it now faces is the highest so far announced of the levies which are poised to begin in August, and the rate suggested a massive jump from the 10% tariffs the Trump administration imposed in early April.
In his letter to Brazilian President Luiz Inacio Lula da Silva, also known as Lula, posted on the social media platform Truth Social, Trump claimed the 50% tariffs were in part due to “Brazil's insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans”, calling on the Brazilian government to drop charges against Bolsonaro, his political ally. For Trump, the way that Brazil has treated Bolsonaro is “an international disgrace”, and the trial should not be taking place. “It is a Witch Hunt that should end IMMEDIATELY!” Trump wrote.
The upcoming high tariffs on Brazil also resulted from “unsustainable Trade Deficits against the United States” caused by many years of Brazil’s trade policies, said Trump in the letters, noting that the deficit is a major threat to U.S. economy and its national security.
Trump in the letter also said he was directing U.S. Trade Representative Jamieson Greer to immediately open a Section 201 investigation into Brazil because of the country’s “continued attacks on the Digital Trade activities of American Companies, as well as other unfair Trading Practices.”
