The US government has proposed a new 25% tariff on Brazilian products after an investigation concluded that the South American country engages in unfair trade practices, according to Bloomberg.
The announcement, published Monday night by the Office of the United States Trade Representative (USTR), excludes a lengthy list of products, including coffee, beef, certain fruits, and aircraft parts.
According to the USTR, Brazilian policies related to digital trade and electronic payment services, enforcement of anti-corruption rules, intellectual property protection, ethanol market access, and illegal deforestation are “unreasonable” and restrict or burden US commerce under Section 301 of the Trade Act.
Financial markets reacted with relative indifference. The Brazilian real strengthened 0.4% against the US dollar, while interest rate swap contracts edged lower. “In our view, the US tariffs are largely irrelevant because there are too many exceptions,” said Álvaro Vivanco, emerging markets strategist at Wells Fargo.
Products exempted from the proposed tariffs include coffee, beef, pulp, orange juice, and civil aircraft equipment. All had already been excluded from the 10% “reciprocal” tariffs imposed last year. Brazilian President Luiz Inácio Lula da Silva said he received the decision “with indignation” and blamed the move in part on his electoral rival, Senator Flávio Bolsonaro, who visited Washington last week.
