US launches probe into Brazil’s trade practices days after 50% tariff move

The United States said Tuesday, July 16, it is investigating Brazil’s “unfair trading practices,” which could provide a legal basis to justify imposing tariffs on South America’s largest economy.It marks a further escalation between the nations after US President Donald Trump lashed out at Brazil for targeting his right-wing, ex-president ally Jair Bolsonaro over his role in an alleged coup attempt.
The probe will determine if Brazil’s economic policies and practices in a number of areas are “unreasonable or discriminatory and burden or restrict US commerce,” the Office of the US Trade Representative said in a statement.
It added that Brazil’s “attacks on American social media companies” will also be considered. The country notably blocked X last year during a dispute between Elon Musk and a Brazilian judge.Also Read: Donald Trump says Pharma tariffs likely by August 1, downplays more deals

This investigation under a commerce law called Section 301 could, depending on its conclusions, lead to punitive US measures such as tariffs.”I have determined that Brazil’s tariff and non-tariff barriers merit a thorough investigation, and potentially, responsive action,” said US Trade Representative Jamieson Greer.

He added that the probe was opened at Trump’s direction.

The US president last week announced a 50% tariff on Brazilian products even though the United States runs a trade surplus with Brazil.

In a letter informing his Brazilian counterpart Luiz Inacio Lula da Silva of the planned measure, Trump criticized the treatment of Bolsonaro as an “international disgrace.”

Bolsonaro is facing trial over accusations he plotted a coup after his narrow 2022 election loss to Lula.

Lula warned of possible reciprocation in response to Trump’s tariff letter, writing on social media that “any unilateral tariff increases will be addressed in light of the Brazilian Law of Economic Reciprocity.”