Geneva: Brazil has filed a World Trade Organization (WTO) complaint against the United States, alleging that U.S. tariffs on its goods violate international trade rules. The dispute, registered as DS640 and circulated to WTO members on August 11, 2025, stems from a request filed August 5 under Article 4.4 of the Dispute Settlement Understanding and Article XXII:1 of the General Agreement on Tariffs and Trade (GATT) 1994. Brazil challenges a 10% duty on all its exports to the U.S. and an additional 40% on certain goods, claiming these measures breach WTO commitments, harm its economy, and escalate tensions between the two nations.
The tariffs trace back to a February 13, 2025, U.S. Presidential Memorandum on “Reciprocal Trade and Tariffs,” which introduced the Fair and Reciprocal Plan to address trade practices deemed unfair, including high tariffs, non-tariff barriers, wage suppression, and currency manipulation. On April 2, 2025, Executive Order 14257 declared a national emergency over persistent U.S. trade deficits, imposing a 10% ad valorem duty on all imports from trading partners, including Brazil, effective April 5, 2025. It also outlined additional duties of 11% to 50% for countries listed in Annex I, effective April 9, 2025, though Brazil was initially exempt. Executive Orders 14266 and 14316, issued April 9 and July 7, 2025, suspended these country-specific duties until August 1, 2025, except for China.
The dispute intensified on July 9, 2025, when U.S. President Donald Trump sent a letter to Brazilian President Luiz Inácio Lula da Silva, announcing a 50% tariff on all Brazilian products starting August 1, 2025. The letter cited non-trade issues, including the Brazilian Supreme Court’s prosecution of former President Jair Bolsonaro and orders against U.S. social media companies for allegedly violating U.S. free speech rights. It also launched a Section 301 investigation into Brazil’s trade practices, published July 18, 2025, in the Federal Register. On July 30, 2025, Trump issued an Executive Order, “Addressing Threats to the United States by the Government of Brazil,” invoking the International Emergency Economic Powers Act and National Emergencies Act to declare a national emergency. This order imposed a 40% ad valorem duty on certain Brazilian goods, effective for entries after 12:01 a.m. EDT on August 6, 2025, resulting in a cumulative 50% duty (10% from EO 14257 plus 40%) on affected products.
The U.S. justifies the tariffs by alleging that Brazilian policies, particularly Supreme Court Justice Alexandre de Moraes’ orders to U.S. platforms to censor First Amendment-protected content, freeze bank accounts, and share U.S. user data, threaten its national security, economy, and foreign policy. It also points to Bolsonaro’s prosecution as evidence of Brazil’s deteriorating rule of law. The order exempts specific goods, including civil aircraft, energy products (e.g. petroleum), fertilizers, informational materials, donations, and goods in transit before August 6, 2025, as detailed in Annex I and Harmonized Tariff Schedule (HTS) subheadings 9903.01.78–83. The U.S. Customs and Border Protection’s CSMS #65807735 specifies the 40% duty under HTS 9903.01.77, outlines foreign trade zone rules requiring “privileged foreign status” per 19 CFR 146.41 for non-exempt goods, confirms drawback eligibility, and details the HTS sequence prioritizing Chapter 98, then Chapter 99 for additional duties, followed by Chapters 1–97. The order authorizes the Secretary of State to monitor Brazil’s actions and propose modifications, such as increasing duties if Brazil retaliates, and delegates implementation to relevant agencies.
Brazil’s WTO complaint contends these measures violate GATT Article I:1 by granting exemptions to some trading partners while targeting Brazilian goods, breaching the most-favored-nation principle. It argues the tariffs exceed the U.S.’s bound rates in its WTO Schedule and impose unlisted charges, violating GATT Article II:1(b) and, consequently, Article II:1(a). Brazil also claims the U.S. breaches DSU Articles 23.1 and 23.2(a) by unilaterally imposing tariffs without WTO dispute procedures, and nullifies Brazil’s GATT benefits under Article XXIII:1, reserving the right to raise additional claims. The complaint initiates a 60-day consultation period, ending October 4, 2025. If no resolution is reached, Brazil may request a WTO panel, though U.S. obstruction of Appellate Body appointments could impede enforcement. Brazil estimates the tariffs impact 35.9% of its U.S. exports, roughly 4% of its global exports, potentially costing billions, according to Vice President Geraldo Alckmin. President Lula described the tariffs as “economic aggression” but expressed willingness to negotiate, while Alckmin suggested exploring BRICS markets. The U.S. defends its actions under GATT Article XXI’s national security exception, a stance used in disputes with China and Canada. This dispute tests the WTO’s ability to mediate amid rising protectionism, with Brazil’s steel and agriculture exports at stake, potentially shaping U.S.-Brazil trade relations and global trade norms.
– global bihari bureau
