The United States has cited Brazil’s preferential tariff arrangements with India and Mexico as one of the reasons for imposing a 25 per cent tariff on certain Brazilian imports, saying the trade concessions place American exporters at a disadvantage.
The tariffs, announced by the Office of the United States Trade Representative (USTR) following a Section 301 investigation into Brazil’s trade practices, are scheduled to take effect on July 22.
US Trade Representative Jamieson Greer said the investigation found that Brazil grants tariff concessions to India and Mexico that are not extended to the United States, resulting in less favourable market access for American goods, according to news agency ANI.
Arrangements with India affected US exports
Quick answers to key questions
What are the reasons behind the US imposing a 25% tariff on Brazilian imports?⌵
The US imposed a 25% tariff on certain Brazilian imports due to Brazil’s preferential tariff arrangements with India and Mexico, which disadvantage American exporters, as highlighted in a Section 301 investigation.
How does Brazil’s tariff policy affect US exports?⌵
Brazil’s tariff concessions to India and Mexico have negatively impacted US exports, as they provide lower tariff rates to these countries that are not available to American goods, resulting in decreased market access for US exporters.
What do US officials expect from Brazil regarding trade concessions?⌵
US officials expect Brazil to extend the same preferential tariff treatments it offers to India and Mexico to American exporters, in an effort to ensure fair competition for US goods.
Why does the US consider Brazil’s trade practices unfair?⌵
The US considers Brazil’s trade practices unfair due to weak anti-corruption enforcement and tariff policies that favor imports from India and Mexico over American goods, limiting US companies’ competitive position.
What sectors are affected by Brazil’s preferential tariff arrangements?⌵
Brazil’s preferential tariff agreements with India and Mexico affect several sectors, including agricultural products, motor vehicles, auto parts, minerals, chemicals, and machinery.
“We have identified in our investigation that Brazil provides unfair preferential tariffs to India and Mexico for a number of different tariff lines. They offer a certain selection of tariff relief to Mexico and India, and they do not offer the same preferential access to American workers and producers,” Greer said.
According to Greer, the preferential arrangements have affected US exports to Brazil.
“To the extent that they’ve given this preferential arrangement over a subset of goods, US exports to Brazil have gone down while exports from those other countries have gone up. There’s been a very clear correlation between this practice and what happened to our exports,” ANI quoted him as saying.
Asked what Washington expects from Brazil, Greer said the US wants treatment similar to what Brazil already offers India and Mexico.
“What we would expect from the Brazilians is that they give us this type of preferential tariff treatment as well. We’re a big trading partner for them… we do want to be able to compete on the best terms, like some of these other countries,” he said.
Indian exporters getting lower tariff rates
Jennifer Thornton, General Counsel at the USTR, said Brazil’s bilateral preferential trade agreements with India and Mexico provide exporters from those countries with lower tariff rates than those applied to US goods.
She said the preferential arrangements span several sectors, including agricultural products, motor vehicles and auto parts, minerals, chemicals and machinery.
According to Thornton, the concessions cover “hundreds of tariff lines” for India and more than 1,000 tariff lines for Mexico, with tariff rates ranging from 10 per cent to 100 per cent below Brazil’s most-favoured-nation tariffs applicable to US exports.
This came as the USTR announced the 25 per cent tariff on selected Brazilian imports after concluding its Section 301 investigation into what it described as unfair Brazilian trade practices.
Meanwhile, Brazil has vowed to retaliate against the US decision to impose tariffs on imports of some Brazilian products.
