The Brazilian government has begun procedures to impose retaliatory tariffs and sanctions on U.S. products in response to the United States' decision to levy a 25% tariff on imports from Brazil. The trade dispute between the two countries is increasingly likely to escalate into a full-blown tariff clash.
On the 16th (local time), according to the Brazilian daily Folha de S.Paulo, the Brazilian government issued a statement saying the United States' unilateral tariff measure lacks legitimacy and that it would immediately begin procedures for retaliatory tariffs and sanctions under the reciprocity law.
The Brazilian government plans to finalize specifics such as which U.S. items will face retaliatory tariffs and the tariff rates after consultations among relevant ministries.
The United States decided the previous day to impose a 25% tariff on imports from Brazil under Section 301 of the Trade Act. It cited what it said were Brazil's unfair trade practices in areas such as digital commerce and tariff policy, intellectual property protection, and access to the ethanol market.
The Brazilian government squarely refuted the U.S. claim. It argued that the United States recorded a cumulative trade surplus of $424.5 billion, about 630 trillion won, in trade with Brazil over the past 15 years, and that the latest tariff measure is an unreasonable sanction that violates multilateral trade rules.
It also stressed that last year 76% of U.S.-made products imported into Brazil were subject to zero tariffs, and the average tariff rate on all U.S. products was only 3.1%. In other words, the U.S. government's explanation that Brazil erected unfair trade barriers against the United States does not match the actual trade situation.
The Brazilian government plans to defend its core economic interests against U.S. trade pressure. At the same time, it will accelerate the conclusion of free trade agreements with blocs such as the Southern Common Market (Mercosur) and the European Union (EU) to improve a trade structure concentrated on specific countries.
The United States is Brazil's second-largest trading partner after China.