USTR finds Brazil's trade practices unreasonable; tariffs likely
On June 2, 2026, the U.S. Trade Representative determined that Brazil's acts, policies, and practices—spanning digital trade, preferential tariffs, IP enforcement, ethanol access, and illegal deforestation—are unreasonable and burden U.S. commerce under Section 301 of the Trade Act of 1974. USTR has proposed responsive action and opened a public comment period (due July 1, 2026) with a hearing on July 6, 2026; final action is due by July 15, 2026. The determination follows a year-long investigation initiated in July 2025 and does not preclude ongoing negotiations with Brazil.
Photo: Rafael Rodrigues / Pexels# USTR Determines Brazil's Trade Practices Unreasonable Under Section 301
On June 2, 2026, the U.S. Trade Representative (USTR) determined that Brazil's acts, policies, and practices across six domains—digital trade, unfair tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation—are unreasonable or discriminatory and burden or restrict U.S. commerce under Section 301(b) of the Trade Act of 1974. USTR has proposed responsive action and opened a public process to solicit comment before finalizing tariffs or other measures by July 15, 2026.
Who and what is affected
Digital Trade and Electronic Payment Services: Brazilian courts have issued secret orders directing U.S. social media companies to remove political content and suspend user profiles—sometimes globally—without disclosure to affected users. These companies have faced significant fines for non-compliance, asset-access restrictions, and site shutdowns. U.S. electronic payment service providers have also been unfairly disadvantaged by Brazilian policies favoring a national champion.
Unfair, Preferential Tariffs: Brazil grants lower tariff rates to hundreds of Mexican and Indian goods under partial-scope agreements in sectors where those countries are globally competitive. This preferential treatment excludes U.S. suppliers from equivalent tariff concessions.
Anti-Corruption Enforcement: USTR found that Brazil fails to take sufficient enforcement action against bribery and corruption.
Intellectual Property Protection: Brazil fails to adequately enforce criminal laws and customs regulations against counterfeit goods, takes unreasonable time to examine patent applications (particularly for biopharmaceuticals), and does not conduct consistent anti-piracy measures.
Ethanol Market Access: Since 2017, Brazil has discontinued balanced tariff treatment for U.S. ethanol and has not provided reciprocal tariff access for American ethanol exports.
Illegal Deforestation: Despite legal frameworks, Brazil has historically failed to enforce anti-deforestation rules effectively.
Next steps and timelines
As stated in USTR's announcement:
"The U.S. Trade Representative has also determined to propose responsive action in this investigation. As set out in the Federal Register notice, the public is invited to provide written comments by July 1, 2026, on the proposed action. USTR will hold a hearing about the proposed action on July 6, 2026."
Interested parties must submit requests to appear at the July 6 hearing by June 22, 2026. USTR will issue final responsive action—which may include tariffs, import restrictions, or other measures—by the statutory deadline of July 15, 2026. Negotiations with Brazil are ongoing but "substantial differences" remain unresolved.
What this means for shippers
Shippers exporting to Brazil or importing Brazilian goods—especially ethanol, textiles, electronics, biopharmaceuticals, agricultural products, and digital services—should prepare for tariff increases or new restrictions likely to take effect mid-July 2026. Review your Brazil-bound supply chains and HS classifications immediately; monitor the Federal Register docket through July 1 to understand proposed duties. If you are a Brazilian exporter or importer of affected goods, file comments by July 1 or request hearing participation by June 22 if your business will face material impact. Use our tariff lookup and landed-cost tools to model scenarios across affected chapters and estimate margin exposure.
