US cites Brazil's tariff concessions to India and Mexico as reason for 25% import tariff

The United States has cited Brazil’s preferential tariff arrangements with India and Mexico as one reason for imposing a 25 percent tariff on some Brazilian imports, saying the trade concessions disadvantage American exporters.

The tariffs, announced by the Office of the United States Trade Representative (USTR) as part of a Section 301 investigation into Brazilian trade practices, are set 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 favorable market access for US goods, news agency ANI reported.

Arrangements with India affected US exports

Quick answers to key questions

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The US imposed a 25% tariff on some Brazilian imports due to Brazil’s preferential tariff agreements with India and Mexico, which disadvantage US exporters, as highlighted in the Section 301 investigation.

Brazil’s tariff concessions to India and Mexico have negatively affected US exports because they provide those countries with lower tariff rates not available to US goods, resulting in limited market access for US exporters.

U.S. officials expect Brazil to extend the same preferential tariff treatment it offers to India and Mexico to U.S. exporters in an effort to ensure fair competition for U.S. goods.

The U.S. considers Brazil’s trade practices unfair due to weak anti-corruption enforcement and a tariff policy that favors imports from India and Mexico over U.S. goods, limiting the competitive position of U.S. companies.

Brazil’s preferential tariff agreements with India and Mexico affect several sectors, including agricultural products, motor vehicles, auto parts, minerals, chemicals and machinery.

“In our investigation, we found that Brazil provides unfair preferential tariffs to India and Mexico on a number of different tariff items. They offer a selection of tariff concessions to Mexico and India and do not offer the same preferential treatment to American workers and manufacturers,” Greer said.

According to Greer, the preferential measures affected US exports to Brazil.

“To the extent that they put this preferential measure on a subset of goods, US exports to Brazil went down, while exports from those other countries went up. There was a very clear correlation between that practice and what happened to our exports,” ANI quoted him as saying.

Asked what Washington expected from Brazil, Greer said the US wanted treatment similar to what Brazil already offers India and Mexico.

“We would expect the Brazilians to give us this type of preferential tariff treatment as well. We are a big trading partner for them … we want to be able to compete on the best terms, like some of these other countries,” he said.

Indian exporters get lower duty rates

Jennifer Thornton, USTR’s general counsel, said Brazil’s bilateral preferential trade agreements with India and Mexico give exporters from those countries lower tariffs than those applied to US goods.

She said the preferential measures cover several sectors, including agricultural products, motor vehicles and auto parts, minerals, chemicals and machinery.

According to Thornton, the concessions cover “hundreds of tariff items” for India and more than 1,000 tariff items for Mexico, with tariffs ranging from 10 to 100 percent below Brazil’s most favored nation rates on U.S. exports.

This comes as the ÚSTR announced a 25 percent 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.