According to Reuters on July 17th, three people familiar with the matter said that on the 16th local time, the Brazilian government convened senior ministers and officials at the presidential palace to prepare for the latest U.S. tariff threats.
On the 15th, the U.S. Trade Representative Office (USTR) announced that it would take final actions under Section 301 of the Trade Act of 1974, imposing a 25% tariff on certain goods from Brazil starting from the 22nd.
According to reports, the measures being considered by the Brazilian government are in line with Brazilian reciprocity laws. These measures may include non-tariff measures targeting the American audio-visual industry, as well as patents related to pharmaceuticals and agriculture. Brazilian officials believe that these options are preferable to imposing tariffs on American imports, as they are unlikely to disrupt Brazil’s supply chain or exacerbate inflation domestically.
"Among those involved, one person said: 'Our next course of action will be dependent on the President's directive, but it is highly likely that there won't be a firm response.'"
Previously, U.S. officials warned that if Brazil took retaliatory measures, Washington would ‘reconsider its actions’. This has increased concerns among Brazilian exporters, and has prompted some exporters to shift their business from the U.S. market to other markets. In the first half of this year, Brazil’s exports to the U.S. decreased by 3%.
Another source familiar with the matter said that Brazil will also resume the dispute over electronic transfer tariffs that it filed with the World Trade Organization (WTO) last year. If the ruling favors Brazil, it will strengthen its legal basis to take retaliatory measures under international trade rules.
Reuters reported that this is the first time the U.S. government has imposed tariffs under the 301 Procedure, following a ruling by the U.S. Supreme Court stating that the Trump administration's use of the International Emergency Economic Powers Act to impose tariffs was unconstitutional. Before the official announcement of the tariffs, Brazil and the United States had negotiated for several months but failed to reach an agreement.
On the 16th, U.S. Secretary of State Rubicoff stated that the Brazilian government “has not engaged in genuine negotiations with the United States”.
The Brazilian government strongly criticized the United States for "having no justification for taking unilateral measures against our country" and announced that Brazil plans to take countermeasures through WTO mechanisms to seek solutions.
