Report mentions Brazil in six of its 397 pages; Trump aides forecast tariffs of 20% or higher
04/01/2025
The United States accused Brazil and several other countries of imposing numerous barriers against American products, in a 397-page report released on Monday (31) by the Office of the United States Trade Representative (USTR), just two days before the sweeping tariff hike announced by President Donald Trump, which he has called “Liberation Day.”
In Washington, D.C., Mr. Trump’s aides seem convinced the president is determined to impose higher tariffs. The tariff increases could reach 20%, impacting virtually all of the U.S.’s trade partners. However, aides admitted they did not know the final scope of the plan to be announced by Mr. Trump. Negotiators who have been in Washington said they would not be surprised if the tariff hike reaches 25%.
On this so-called “Liberation Day,” the “reciprocal tariffs” regime could generate an additional $600 billion per year in revenue for the U.S., or $6 trillion over a decade, according to Peter Navarro, a hardline advisor close to Mr. Trump. On top of this, an additional $100 billion per year would come specifically from a 25% tariff on foreign automobiles.
Although Brazil argues it has a trade deficit with the U.S., nearly six pages of complaints against Brazilian trade practices in the USTR report pave the way for higher tariffs on Brazilian products under the principle of reciprocity.
The Trump administration argued in the document that Brazil “imposes relatively high tariffs on imports across a wide range of sectors, including automobiles, automotive parts, information technology and electronics, chemicals, plastics, industrial machinery, steel, and textiles and apparel.”
It also complained that Brazil’s bound tariff rates are often much higher than the applied rates, creating significant uncertainty for U.S. exporters in the Brazilian market, as “the government frequently modifies tariff rates within the flexibilities of MERCOSUR.” The USTR added: “The lack of predictability with regard to tariff rates makes it difficult for U.S. exporters to forecast the costs of doing business in Brazil.”
The “2025 National Trade Estimate Report” was submitted to Mr. Trump and Congress. Jamieson Greer, head of the USTR, said that no American president in modern history had recognized the comprehensive and harmful foreign trade barriers faced by U.S. exporters more than President Trump. He added that, under the president’s leadership, the administration was working to address what he sees as unfair and non-reciprocal practices, seeking to restore fairness and put American companies and workers first in the global market.
The USTR noted that trade barriers are not fixed in their definition but can broadly include “laws, regulations, policies, or government practices—including non-market policies and practices—that distort or impair fair competition.” These include measures that protect domestic goods and services from foreign competition, artificially promote exports of specific domestic goods and services, or fail to provide adequate and effective protection of intellectual property rights.
In the pages dedicated to Brazil, the U.S. highlighted ethanol tariffs as the primary barrier. It noted that between 2011 and 2017, the bilateral ethanol trade was virtually duty-free. However, Brazil then imposed tariffs, initially at 20%, followed by the establishment of a quota that reduced what had been “robust” trade, and in 2018 set the tariff at 18%.
“The United States continues to engage with Brazil to lower its ethanol tariff to provide reciprocal treatment for trade in ethanol between the United States and Brazil,” the document said.
The report also raised other complaints. One relates to the Industrial Product Tax (IPI) of 16.25% ad valorem applied to cachaça, while other alcoholic beverages, including U.S. imports, are subject to a 19.5% IPI.
It noted that, in the audiovisual sector, Brazil imposes several taxes on foreign products that do not apply equally to domestic products. It also pointed out that remittances to foreign producers of audiovisual works are subject to a 25% withholding tax.
The USTR complained that Brazil restricts the entry of certain types of remanufactured goods, such as earthmoving equipment, automotive parts, and medical equipment. With a few exceptions, Brazil generally prohibits the importation of used consumer goods.
It also mentioned automatic and non-automatic import licensing, inconsistent documentation requirements for importing certain types of goods, regulations on biofuels, sanitary and phytosanitary barriers, and obstacles to foreign companies’ participation in government procurement processes. Furthermore, it questioned Brazil’s enforcement of intellectual property rights, efforts to combat piracy, and barriers to the acquisition of services and digital trade.
Ongoing dialogue
Talks between Brazil and the U.S. continue. A phone call was scheduled for Monday (31) between Foreign Minister Mauro Vieira and the USTR head, Jamieson Greer. The call was seen as part of these ongoing negotiations, but no major breakthrough was expected. Neither side issued a statement about the content of the conversation or whether it actually took place.
As Valor reported on Saturday, in the midst of uncertainty in Washington, American signals pointed to specific issues involving Brazil.
The country is unlikely to escape new tariffs. Mr. Trump—and not only him in Washington—is fixated on Brazil’s ethanol import tariff of 18%, compared to 2.5% in the U.S. When he signed the executive order to prepare reciprocal tariffs, the first country he mentioned was Brazil, and the first product was ethanol.
On Wednesday, no exceptions were expected in the case of steel—meaning there would be no quotas requested by Brazil, at least initially. It remains unclear whether there will be exceptions for other so-called reciprocal tariffs. Six days ago, Mr. Trump said he did not want “too many exceptions” in the package—but he could always change his mind at the last minute.
A potential deal trading lower ethanol tariffs in Brazil for a quota on U.S. semi-finished steel exports will likely remain on the radar in Brasília and Washington after April 2.
*By Assis Moreira — Geneva
Source: Valor International