USTR Begins Section 301 Investigation into Brazil’s Trade Practices

Trade Update • July 18, 2025

Key Points:

• The Office of the U.S. Trade Representative (USTR) has launched a Section 301 investigation into Brazil’s trade policies.

• The investigation focuses on digital trade restrictions, tariff disparities, intellectual property enforcement, ethanol tariffs, anti-corruption measures, and illegal deforestation.

• The USTR invites public comment by August 18, 2025, and will hold a hearing on September 3, 2025.

• This could lead to new U.S. tariffs or trade actions if unfair practices are confirmed.

On July 15, 2025, the USTR initiated a Section 301 investigation under the Trade Act of 1974 to determine whether Brazil is engaging in unfair trade practices that harm U.S. companies, workers, and exporters. This step follows growing concerns about Brazil’s policies that may unreasonably restrict or burden U.S. commerce.

Scope of the Investigation

• Digital Trade and Electronic Payments: The Section 301 investigation addresses allegations that Brazil limits U.S. firms’ ability to provide digital services, including possible retaliation related to content moderation and restrictions on transferring personal data.

• Tariffs: Brazil reportedly applies lower tariffs to some competing countries while maintaining higher tariffs on U.S. goods, putting American exporters at a disadvantage.

• Ethanol Tariffs: Brazil has significantly raised tariffs on U.S. ethanol, adversely affecting exports, which have dropped sharply in recent years.

• Intellectual Property (IP) Enforcement: Brazil is accused of insufficiently protecting intellectual property rights, impacting U.S. innovation-driven industries.

• Anti-Corruption Enforcement: The U.S. asserts that Brazil’s inadequate enforcement of anti-corruption laws undermines fair trade norms.

• Illegal Deforestation: Brazil’s failure to fully enforce environmental laws is alleged to unfairly benefit Brazilian timber and agricultural producers vis-à-vis U.S. competitors.

Process and Next Steps

• The USTR has requested consultations with the Brazilian government to discuss these concerns.

• Interested parties are invited to submit written comments and requests to appear at the public hearing by August 18, 2025. Written comments, hearing requests, and other documents must be submitted via the USTR portal at https://comments.ustr.gov/s/.

• A public hearing related to this investigation will be held on September 3, 2025.

• For questions, contact Philip Butler or Megan Grimball (Section 301 Committee Chairs) or Megan Paster, Assistant General Counsel, at 202.395.5725.

Potential Impact

If the investigation finds that Brazil’s policies unfairly restrict U.S. trade, the U.S. government may respond by imposing higher tariffs or other trade measures to protect American businesses and level the playing field.

For more information, please refer to the official Federal Notice.

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