U.S. Targets Trade Partners Ahead of Reciprocal Tariff Implementation: Key Issues with Brazil

The U.S. is intensifying its trade stance against major partners as it prepares to roll out reciprocal tariffs. In a 397-page report published on Monday (March 31) by the Office of the United States Trade Representative (USTR), Brazil and several other nations are accused of imposing excessive trade barriers and high tariffs on American goods.

With the announcement of the new tariff measures expected on Wednesday (April 2), the move signals a significant shift in trade relations that could reshape the global market. President Donald Trump has reaffirmed his commitment to enforcing reciprocal tariffs, targeting countries that impose restrictions on American products.

Major Trade Barriers Identified by the USTR Against Brazil

The report highlights a range of restrictive policies implemented by Brazil, making it a key focus for U.S. trade retaliation. Below are the primary concerns raised by the USTR:

1. High and Unpredictable Tariffs

The U.S. criticizes Brazil for maintaining high average tariff rates and frequently modifying duty rates, creating uncertainty for American exporters. This lack of stability complicates business planning and disrupts trade flows.

2. Barriers to Ethanol Imports

Since 2017, Brazil has imposed taxes on U.S. ethanol imports, reversing a period of duty-free trade. Washington is pushing for a reciprocal agreement to level the playing field in this sector.

3. Discriminatory Taxes in the Audiovisual Sector

The report highlights Brazil's higher tax rates on foreign content and advertising, alongside mandatory quotas for national productions in both cable and broadcast television.

4. Restrictions on Remanufactured Products

Brazil enforces strict limitations on the importation of used and remanufactured goods, including auto parts, medical equipment, and industrial machinery, which limits market access for U.S. companies.

5. Complex Import Licensing Requirements

Non-automatic import licenses and opaque regulatory procedures hinder the entry of U.S. goods, particularly in sectors such as footwear, apparel, and automobiles.

6. Rigid Customs Regulations

American businesses report significant challenges due to excessive documentation requirements for temporary imports, even for products intended for trade fairs and exhibitions.

7. Technical and Sanitary Barriers

From restrictions under Brazil's RenovaBio biofuel program to the prohibition of U.S. pork imports, the U.S. contends that many of these measures lack scientific justification and unfairly block competition.

8. Favoritism in Government Procurement

Brazil is accused of favoring domestic companies in public tenders and requiring technology transfers from foreign suppliers, particularly in the healthcare and defense sectors.

9. Weak Intellectual Property Protection

Despite recent improvements, Brazil continues to struggle with widespread piracy, slow patent approvals, and weak enforcement measures—issues that U.S. businesses claim undermine innovation and investment.

10. Restrictions on Foreign Financial Services and Telecoms

Barriers in banking, insurance, and satellite communications create a less competitive environment, discouraging American service providers from expanding into the Brazilian market.

11. High Taxes on Express Shipments

Brazil imposes a 60% tax on express shipments, with a per-package limit of $3,000—an obstacle that significantly impacts small businesses and cross-border e-commerce.

12. Uncertainty in Digital Trade Regulations

The U.S. raises concerns over Brazil's proposed network usage tax and the unclear enforcement of data protection laws, which could restrict digital trade and cross-border data flows.

Implications of U.S. Retaliatory Tariffs

Brazil argues that its effective tariff rate on U.S. goods averages only 2.7%, but the USTR contends that the broader regulatory framework justifies countermeasures. The upcoming announcement of reciprocal tariffs is expected to reshape bilateral trade relations, with potential ripple effects on global markets.

As the world awaits President Trump's final decision on April 2, business leaders and policymakers brace for the next chapter in an escalating trade dispute that could redefine economic partnerships in 2025 and beyond.