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🇸🇬 Singapore /Economy & Trade

US fires first shots in new tariffs offensive with 25% tax on most Brazil imports

From The Straits Times · () English

Summarized and contextualized by DistantNews.

At a glance

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  • The U.S. has imposed 25% duties on most Brazilian imports, reviving a trade war strategy under the Trump administration.
  • This move could involve dozens of countries as the U.S. reworks its tariff policy after Supreme Court rulings.
  • Brazil's president condemned the decision as unjustified and vowed reciprocal measures, while economists see it as a precursor to trade negotiations.

The United States has launched a new tariff offensive, imposing 25% duties on most imports from Brazil. This move signals a revival of the Trump administration's trade war tactics, potentially drawing in numerous countries as the U.S. recalibrates its tariff policies following recent Supreme Court decisions.

Extensive negotiations with Brazil over the past year have not resolved these issues, but we remain open to continuing negotiations with Brazil to bring about long-needed changes to the problems identified in this investigation.

— Jamieson GreerU.S. Trade Representative explaining the rationale and future possibilities regarding the tariffs.

The new tariffs are rooted in investigations into unfair trade practices under Section 301 of the U.S. Trade Act. The U.S. Trade Representative's office has opened nearly 80 cases involving dozens of countries, examining issues such as excess industrial capacity and trade in goods produced with forced labor.

U.S. Trade Representative Jamieson Greer stated that extensive negotiations with Brazil over the past year had failed to resolve the identified issues, but affirmed the U.S. remains open to further discussions. Brazilian President Luiz Inacio Lula da Silva decried the U.S. decision as lacking justification and announced Brazil would initiate proceedings under its "Reciprocity Law" and pursue the matter within the WTO framework.

The U.S. decision was without any justification.

— Luiz Inacio Lula da SilvaBrazilian President's reaction to the imposition of U.S. tariffs.

Economists view this action as a potential precursor to a new round of bilateral trade negotiations, characterized by the Trump administration's "maximalist negotiating tactics." The situation serves as a warning to other major U.S. trading partners, like India, highlighting Washington's willingness to use trade actions beyond traditional tariffs and market access to address policies perceived as detrimental to U.S. businesses.

It likely is the kickoff of a round of bilateral negotiations that will result in a trade framework that involves tariffs and ongoing negotiations rather than part of a comprehensive overall trade policy.

— Joe BrusuelasChief economist at RSM US, commenting on the U.S. move.

Secretary of State Marco Rubio placed blame on President Lula, asserting that the Brazilian leader and his government had not negotiated in good faith. Rubio specifically stated, "Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that."

It shows that Washington can use trade action not only over tariffs and market access, but also against any policy it sees as unfair to U.S. business.

— Ajay SrivastavaFounder of the Global Trade Research Initiative think tank, commenting on the implications for India.
DistantNews Editorial

Originally published by The Straits Times. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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