Trump administration proposes new 25% tariffs on Brazil under section 301

The Trump administration has proposed new punitive tariffs of 25 per cent on Brazilian Goods, under Section 301, accusing the South American nation of engaging in unfair practices that unreasonably burden US commerce. These practices come under a range of issues like anti-corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation. However, it excluded some items such as beef, coffee, rare earths, other metals and aircraft parts from the new tariffs.

Brazil's practices in the areas investigated "are unreasonable and burden or restrict U.S. commerce, are thus actionable under Section 301(b) of ​the Trade Act," said the USTR in a statement. According to Jamieson Greer, the US Trade Representative, the investigation was launched at the direction of US President Donald Trump.

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Replacement of the earlier 50% tariffs

The two sides have previously engaged in “several constructive meetings”, but they continue to have several differences. The USTR will have a hearing on the proposed measures on July 6. Brazil had been hit with a 50 per cent tariff partly in retaliation for the ongoing prosecution of the country’s former President and Trump's political ally, Jair Bolsonaro. Because the US Supreme Court struck down a 40 per cent portion of the tariff, calling it illegal. This allowed the US to levy only a 10 per cent tariff on the global exports to the US. Further, the White House announced that a certain adjustment of tariffs on items such as agricultural equipment, like combines and harvesters, will be dropped from 25 per cent to 15 per cent. Further capital equipment that includes at least 85 per cent of US Steel and Aluminium will also qualify for a 10 per cent duty rate.

This comes just as the Brazilian Presidential candidate and the son of Jair Bolsonaro, Flavio Bolsonaro, unofficially visited the White House at the end of May. Flavio is seen as the top contender to challenge Lula in the South American country's October election.