USTR Announces Initiation of Section 301 Investigation of Brazil’s Unfair Trading Practices Public Comment DEADLINE August 18, 2025

July 16, 2025

Print This Article Share it With Friends

(Office of U.S. Trade Representative) Today (July 15, 2025), the Office of the United States Trade Representative initiated an investigation of Brazil under Section 301 of the Trade Act of 1974. The investigation will seek to determine whether acts, policies, and practices of the Government of Brazil related to digital trade and electronic payment services; unfair, preferential tariffs; anti-corruption interference; intellectual property protection; ethanol market access; and illegal deforestation are unreasonable or discriminatory and burden or restrict U.S. commerce.

“At President Trump’s direction, I am launching a Section 301 investigation into Brazil’s attacks on American social media companies as well as other unfair trading practices that harm American companies, workers, farmers, and technology innovators,” said Ambassador Greer. “USTR has detailed Brazil’s unfair trade practices that restrict the ability of U.S. exporters to access its market for decades in the annual National Trade Estimate (NTE) Report. After consulting with other government agencies, cleared advisers, and Congress, I have determined that Brazil’s tariff and non-tariff barriers merit a thorough investigation, and potentially, responsive action."

Background

Section 301 of the Trade Act of 1974, as amended, (Trade Act) is designed to address unfair foreign practices affecting U.S. commerce. Section 301 may be used to respond to unjustifiable, unreasonable, or discriminatory foreign government practices that burden or restrict U.S. commerce. Under Section 302(b) of the Trade Act, the Trade Representative may self-initiate an investigation under Section 301.

A Section 301(b) investigation examines whether the acts, policies, or practices are unreasonable or discriminatory and burden or restrict U.S. commerce. Considering the specific direction of the President, and the advice of the inter-agency Section 301 Committee, the United States Trade Representative has initiated an investigation. The U.S. Trade Representative must seek consultations with the foreign government whose acts, policies, or practices are under investigation. USTR has requested consultations with Brazil in connection with the investigation. USTR will hold a hearing in connection with this investigation on September 3, 2025. To be assured of consideration, interested persons should submit written comments, requests to appear at the hearing, along with a summary of the testimony, by August 18, 2025. USTR will hold a hearing in connection with this investigation on September 3, 2025.

As set out in the Federal Register notice, the investigation relates to a number of trading practices, 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; and
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.

A copy of the Federal Register Notice is available here.

A docket for comments regarding the investigation will be available here.

A docket for requests to appear at the public hearing to be held in connection with this investigation will be available here. READ MORE

Related articles

US launches probe into Brazil's trade practices, digital payment services (Reuters)
US launches probe into Brazil’s trade practices (CNN)
Grassley frustrated with Brazil’s ethanol tariffs (Brownfield Ag News)
Opinion: The nation needs new trade deals now (National Corn Growers Association/Agri-Pulse)
Ethanol Blog: Trump Administration Launches Trade Investigation of Brazil Including Ethanol Tariff Against US Producers (DTN Progressive Farmer)
Ethanol Industry Supports Trade Investigation of Brazil (Energy.AgWired.com)
Trump targets Brazil ethanol market American firms helped fuel (Bloomberg)
USTR opens investigation into Brazil’s unfair ethanol trade practices (Ethanol Producer Magazine)

Excerpt from Reuters: Trump justified his 50% tariff from August 1, well above the rate of 10% initially proposed, with a demand for an end to the trial of former President Jair Bolsonaro for allegedly plotting a coup.

The high tariff for Brazil surprised many trade experts since its U.S. goods imports exceed its exports, and because Trump linked the rate so clearly to Bolsonaro's trial.

Brazil offered no immediate reaction to news of the U.S. investigation. On Monday, Vice President Geraldo Alckmin said it had yet to receive a response from Washington to an offer it made in trade talks two months ago.

During his first term, Trump used Section 301 of the Trade Act of 1974 to justify a spate of tariffs against China. It was also used to investigate other countries for digital services taxes on U.S. tech firms.

In a statement, USTR said Brazil disadvantaged U.S. firms by setting lower tariffs on exports of other trading partners and accused it of failing to battle corruption.

It added that Brazil also charged substantially higher tariffs on U.S. ethanol exports, and "appears to be failing" to enforce laws against illegal deforestation, which it said harmed the competitiveness of U.S. timber producers. READ MORE

Excerpt from CNN: The right-wing former president, who has boasted of his close ties with Trump, is currently on trial for allegedly attempting a coup to overturn Lula’s 2022 election victory.

In its investigation announcement, the USTR expressed concerns that Brazilian authorities could undermine the competitiveness of American digital companies by retaliating against them for failing to censor political speech or restricting their ability to operate in the country.

It also accused Brazil of disadvantaging American exports by offering lower tariffs to “certain globally competitive trade partners,” failing to protect American intellectual property rights, and backtracking from its earlier willingness to grant virtually duty-free access for US ethanol and imposing instead a “substantially higher tariff.”

Most countries targeted by Trump’s tariffs are those with which the US runs a trade deficit – meaning the US imports more goods from the nation than it exports to it.

But the US ran a $6.8 billion trade surplus with Brazil last year, and it has not had a trade deficit with the country for 18 years. READ MORE

Excerpt from Brownfield Ag News: U.S. Senator Chuck Grassley says he’s asking the Trump administration to address Brazil’s 18% tariff on ethanol imports.

“Brazil’s unfair tariffs have allowed the country to shelter its domestic ethanol industry from competition here in the United States. Brazil is trying to take global market share away from the United States by producing artificially cheap ethanol.”

The Iowa Republican says U.S. ethanol exports to Brazil have essentially dried up in recent years.

“The Biden administration failed to take clear action to address this problem. I’m hoping the Trump administration can utilize trade negotiations with Brazil to level the playing field and increase market access for US ethanol producers.”

In 2020, the Renewable Fuels Association asked the first Trump administration to consider imposing reciprocal tariffs against Brazil in hopes that it would convince them to remove the tariffs, or at least bring them back to the negotiating table. READ MORE

Excerpt from DTN Progressive Farmer: USTR is required to consult with the Brazilian government and has scheduled a hearing in connection with the investigation on Sept. 3, 2025. Written comments and requests to appear at the hearing, along with a summary of the testimony, are required to be submitted by Aug. 18, 2025.

"We applaud the Trump administration for this important action," RFA President and CEO Geoff Cooper said in a statement.

"For almost a decade now, we have spent precious time and resources fighting back against an unfair and unjustified tariff regime imposed by Brazil's government on U.S. ethanol imports. What's more ironic is that these tariff barriers have been erected against U.S. ethanol imports while our country has openly accepted -- and even encouraged and incentivized -- ethanol imports from Brazil."

The USTR's investigation is focusing on several fronts including digital trade and electronic payment services; "unfair, preferential" tariffs;

anti-corruption enforcement; intellectual property protection; and "illegal" deforestation that the USTR said is "undermining the competitiveness of U.S. producers" of timber and agricultural products.

In October 2023, Brazilian fuel importers formally requested a reduction in ethanol duties because the tariff reportedly raised fuel costs for domestic consumers.

In anticipation of an open comment period held by the Brazilian government, the three groups submitted joint comments:

"Considering this significant discrepancy in our historically productive commercial relationship between countries, we would like to stress that the U.S. industry will continue to advocate for restrictive measures to entry for Brazilian ethanol into the U.S. in the case that the Brazilian government does not rethink the current tariff policies," the groups said.

"Despite the promising opportunities emerging new ethanol export markets could bring to both countries, we stress that we are not willing to cooperate with Brazil in any possible partnerships, nor with technology transferring or within new uses for ethanol such as SAF (sustainable aviation fuel), in case the market is not completely open for free trade for ethanol. We strongly consider the permanent reinstatement of the duty-free access for ethanol as a window of opportunity to strengthen the bilateral agenda and stimulate trade cooperation between Brazil and the United States." READ MORE