The Office of the U.S. Trade Representative (USTR) initiated a trade investigation into Brazil, citing a range of alleged unfair trade practices, including those affecting access to the country’s ethanol market.
The probe aims to determine whether Brazil’s policies and actions regarding digital trade, electronic payment systems, preferential tariffs, anti-corruption enforcement, intellectual property protections, ethanol imports, and illegal deforestation are unreasonable, discriminatory, or create barriers to U.S. commerce.
“At President Trump’s direction, I am launching a Section 301 investigation 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,” said Ambassador Greer. “USTR has detailed Brazil’s unfair trade practices that restrict the ability of U.S. exporters to access its market for decades in the annual National Trade Estimate (NTE) Report. After consulting with other government agencies, cleared advisers, and Congress, I have determined that Brazil’s tariff and non-tariff barriers merit a thorough investigation, and potentially, responsive action.”
Background
Section 301 of the Trade Act of 1974, as amended, (Trade Act) is designed to address unfair foreign practices affecting U.S. commerce. Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government practices that burden or restrict U.S. commerce. Under Section 302(b) of the Trade Act, the Trade Representative may self-initiate an investigation under Section 301.
A Section 301(b) investigation examines whether the acts, policies, or practices are unreasonable or discriminatory and burden or restrict U.S. commerce. Considering the specific direction of the President, and the advice of the inter-agency Section 301 Committee, the United States Trade Representative has initiated an investigation. The U.S. Trade Representative must seek consultations with the foreign government whose acts, policies, or practices are under investigation. USTR has requested consultations with Brazil in connection with the investigation. USTR will hold a hearing in connection with this investigation on September 3, 2025. To be assured of consideration, interested persons should submit written comments, requests to appear at the hearing, along with a summary of the testimony, by August 18, 2025. USTR will hold a hearing in connection with this investigation on September 3, 2025.
As set out in the Federal Register notice, the investigation relates to a number of trading practices, including:
- Digital trade and electronic payment services: Brazil may undermine the competitiveness of U.S. companies engaged in these sectors, for example, by retaliating against them for failing to censor political speech or restricting their ability to provide services in the country;
- Unfair, preferential tariffs: Brazil accords lower, preferential tariff rates to the exports of certain globally competitive trade partners, thereby disadvantaging U.S. exports;
- Anti-corruption enforcement: Brazil’s failure to enforce anti-corruption and transparency measures raises concerns in relation to norms relating to fighting bribery and corruption;
- Intellectual property protection: Brazil apparently denies adequate and effective protection and enforcement of intellectual property rights, harming American workers whose livelihoods are tied to America’s innovation- and creativity-driven sectors;
- Ethanol: Brazil has walked away from its willingness to provide virtually duty-free treatment for U.S. ethanol and instead now applies a substantially higher tariff on U.S. ethanol exports; and
- Illegal deforestation: Brazil appears to be failing to effectively enforce laws and regulations designed to stop illegal deforestation, thereby undermining the competitiveness of U.S. producers of timber and agricultural products.
