New taxation proposed by the US could impact a third of Brazilian exports with tariffs of up to 37.5%, projects CNI

Projection by the National Confederation of Industry (CNI) indicates that, if the new tariffs proposed by the United States Trade Representative (USTR) come into force, 31.6% of Brazilian exports to the USA will be taxed at 37.5%, compared to the current 10%. The change represents an increase of 27.5 percentage points.
Another 3.6% of Brazilian shipments to the North American market would be subject to a tariff of 12.5%, compared to the 10% currently charged, an increase of 2.5 percentage points.
This is because, at the beginning of this month, the United States concluded an investigation that accuses the Brazilian government of adopting practices that "encumber or restrict" trade with North American companies. Among the points mentioned are the PIX, the fight against illegal deforestation, piracy and alleged failures in the application of anti-corruption laws.
As a result, the USTR proposed the imposition of an additional tariff of 25% on Brazilian products. The body, however, drew up a list of exceptions for items considered strategic by the United States, such as beef, fruit, coffee, aircraft and rare earth minerals, among others.
According to the CNI, 35.2% of Brazilian exports to the United States would be reached by the new measures. When also considering the sectoral tariffs already applied based on Section 232 of North American commercial legislation, the portion of exports subject to some type of surcharge could reach 54.1%.
The measures, however, have not yet come into force. Before a final decision is made, the proposal will still undergo public consultation and hearings conducted by North American authorities.
Most affected products
Among the most affected products is pig iron. Currently subject to a 10% tariff based on Section 122, the product would now face a 37.5% tax rate if the proposal is implemented. In 2024, Brazilian pig iron exports to the United States totaled US$ 1.5 billion.
5 products that could be impacted by a 37.5% tariff
Unalloyed pig iron;
Cane sugar in solid form;
Inedible tallow;
Non-denatured ethyl alcohol;
Standard pine wood frames.
5 products which may be impacts with a tariff of 12.5%
Iron ore and concentrates, agglomerated pellets;
Quartzite slabs;
Essential oils from orange citrus fruits;
Silicon;
Chemical wood pulp, sulfate or soda, dissolving grades.
The survey considers the lists of exceptions published by the USTR and keeps exports that are already subject to Section 232 measures exempt, according to reports released by the agency.
What is the US trade investigation?
The investigation against Brazil was opened based on Section 301 of the Trade Act of 1974. The mechanism, created by the US Congress, allows the American government to investigate countries whose policies or practices are considered harmful to trade, companies or exporters Americans.
The legislation gives the USTR the power to investigate possible trade barriers and, if it concludes that they exist, recommend retaliatory measures, such as the imposition of tariffs on imported products.
The mechanism has already been used in different trade disputes, especially against China. In 2019, during Trump's first term, the US applied tariffs on more than US$120 billion in Chinese products based on this legislation.
Part of these tariffs remain in force, and were expanded during Joe Biden's administration.
At the same time, the USTR concluded an investigation into forced labor in almost 90 countries. Brazil was included among the nations that, according to the organization, do not adopt or effectively apply restrictions on the import of goods produced with forced labor. In this case, the proposal is to apply an additional tariff of 12.5%, with an exemption for 1,655 codes.
When the two measures apply simultaneously to certain products, the total additional tariff can reach 37.5%.
Why was Brazil the target of this investigation?
According to the USTR's final report, the following practices of the Brazilian government "encumber or restrict" trade with the USA:
Digital commerce and payment services (PIX): the text states that the Central Bank favors PIX, an instant payment system, to the detriment of American providers. According to the USTR, the BC acts at the same time as a regulator and operator of the system, imposing its use and limiting the fees charged by competitors.
Regulation of social networks: the USTR states that Brazilian courts issued confidential orders for American social media companies to remove political content and suspend profiles of US residents - in some cases, with global reach, in addition to prohibiting the disclosure of these decisions. The body also criticizes the application of high fines, restrictions on assets and bank accounts and, in at least one case, the complete blocking of a website.
Unfair preferential tariffs: the American government contests the trade agreements maintained by Brazil with Mexico and India. According to the USTR, the country grants lower tariffs to hundreds of products from these markets in sectors in which both are considered advanced and globally competitive producers;
Illegal deforestation: the document states that, although Brazil has a legal framework to combat illegal deforestation, the country has historically failed to apply it effectively, allowing the problem to continue;
Access to the ethanol market: the American body argues that Brazil abruptly interrupted treatment in 2017 balanced tariff applied to ethanol and, since then, does not offer reciprocity to fuel exports from the USA;
Protection of intellectual property: the USA points out flaws in the application of criminal and customs laws against counterfeiting products, in addition to slowness in analyzing patents and continuous actions to combat piracy. The report also criticizes the time taken to analyze patents by the National Institute of Industrial Property (INPI), especially in the biopharmaceutical sector, which can take up to 109 months.
Fighting corruption: the American representation concluded that Brazil does not adopt sufficient measures to combat bribery and corruption. The document cites the annulment of Operation Lava Jato processes by the STF in 2023, the "without transparency" renegotiation of leniency agreements and the country's fall in Transparency International's Corruption Perception Index.

Source: G1