The Office of the U.S. Trade Representative (USTR) has launched a formal investigation into Brazil’s trade practices, citing a series of alleged measures that may be discriminatory or restrictive to U.S. commerce. Key concerns include limited access to Brazil’s ethanol market, digital trade restrictions, and failure to enforce anti-corruption measures.
The investigation, initiated under Section 301 of the Trade Act of 1974, will examine whether Brazil’s policies in areas such as electronic payments, preferential tariffs, intellectual property enforcement, and environmental protections constitute unfair trade practices. The probe also includes scrutiny of Brazil’s handling of illegal deforestation, which U.S. officials argue puts American producers at a disadvantage.
Ambassador Greer, announcing the investigation, said it was undertaken at the direction of former President Donald Trump. “This action responds to Brazil’s continued barriers that harm American companies, workers, farmers, and innovators. For years, the USTR has highlighted Brazil’s unfair trade practices in its National Trade Estimate Report. After consultations with federal agencies, Congress, and industry advisers, we have determined that Brazil’s actions warrant a full review and possibly further measures,” she stated.
Focus Areas of the Investigation
According to the notice published in the Federal Register, the USTR will focus on the following areas:
- Digital trade and payment systems: The U.S. alleges that Brazil’s regulations may hinder U.S. digital companies by penalizing them for not censoring content and by limiting their ability to operate in Brazilian markets.
- Preferential tariffs: Brazil is accused of favoring certain trade partners with more favorable tariff rates, putting American exporters at a competitive disadvantage.
- Anti-corruption enforcement: The investigation will assess whether Brazil is failing to meet international standards on transparency and anti-bribery enforcement.
- Intellectual property rights: The U.S. believes that Brazil does not offer adequate protection for intellectual property, harming sectors of the American economy tied to innovation and creative industries.
- Ethanol imports: A key issue is Brazil’s decision to impose higher tariffs on U.S. ethanol, walking back from earlier commitments to provide near duty-free access to American ethanol exporters.
- Illegal deforestation: Brazil is also under scrutiny for what the U.S. views as weak enforcement of environmental laws, particularly those meant to prevent illegal logging. Officials say this contributes to unfair competition against U.S. timber and agricultural producers.
Next Steps
The USTR has formally requested consultations with the Brazilian government as part of the investigation process. A public hearing is scheduled for September 3, 2025. Interested parties wishing to participate or submit written comments must do so by August 18, 2025. The outcome of the investigation could lead to trade actions, including tariffs or other retaliatory measures, if Brazil is found to be in violation of fair trade obligations.
Section 301 investigations are a tool used by the U.S. government to address foreign trade practices deemed harmful to American economic interests. The launch of this investigation signals growing tensions in U.S.-Brazil trade relations, particularly around issues of market access and regulatory transparency.
