USTR Launches Section 301 Investigation into Brazil's Trade Practices

On July 15, 2025, the Office of the U.S. Trade Representative (USTR) announced the initiation of a Section 301 investigation into Brazil’s trade practices, citing a broad range of policies that USTR says unfairly disadvantage U.S. companies.

Relevant Documents

• USTR Press Release
• Federal Register Notice
• USTR Submission Portal

According to USTR, the investigation will focus on several areas, including:

• Digital trade and electronic payment services: Brazil may undermine the competitiveness of U.S. companies engaged in these sectors, for example, by retaliating against them for failing to censor political speech or restricting their ability to provide services in the country;
• Unfair, preferential tariffs: Brazil accords lower, preferential tariff rates to the exports of certain globally competitive trade partners, thereby disadvantaging U.S. exports;
• Anti-corruption enforcement: Brazil’s failure to enforce anti-corruption and transparency measures raises concerns in relation to norms relating to fighting bribery and corruption;
• Intellectual property protection: Brazil apparently denies adequate and effective protection and enforcement of intellectual property rights, harming American workers whose livelihoods are tied to America’s innovation- and creativity-driven sectors;
• Ethanol: Brazil has walked away from its willingness to provide virtually duty-free treatment for U.S. ethanol and instead now applies a substantially higher tariff on U.S. ethanol exports;
• Illegal deforestation: Brazil appears to be failing to effectively enforce laws and regulations designed to stop illegal deforestation, thereby undermining the competitiveness of U.S. producers of timber and agricultural products.

According to the Federal Register notice, Brazil’s preferential tariff agreements with countries like Mexico and India are creating a disadvantage across multiple U.S. sectors, including agricultural products, motor vehicles and parts, minerals, chemicals, and machinery. Nearly all of Brazil’s imports of motor vehicles and parts from Mexico entered duty-free in 2023, while similar U.S. goods were subject to MFN tariffs ranging from 14% to 35%.

USTR contends that this differential treatment provides Mexican and Indian exporters with a competitive edge in the Brazilian market. “When Brazil applies lower tariffs on goods of other large and competitive economies, while continuing to subject U.S. goods to its high MFN rates, U.S. exports are denied a level playing field in Brazil’s market,” the USTR notice states. “This can suppress U.S. exports and economic output, with negative consequences for employment and domestic production.”