Wednesday's announcement by the USTR office follows months of fruitless negotiations and over 30 meetings between U.S. and Brazilian officials after the Trump administration proposed new tariffs on many imports from Brazil in June, saying its practices were unfair on a range of issues from digital trade to illegal deforestation.
"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," U.S. Trade Representative Jamieson Greer said in a statement.
Brazilian President Luiz Inacio Lula da Silva, who is expected to run for reelection in October, said the U.S. decision lacks justification. Brazilian officials have long suggested, in private conversations, that the motives for the new tariffs were political, rather than technical, making negotiations fruitless.
Brazil would immediately begin proceedings to invoke instruments provided for under the "Reciprocity Law" and revisit the matter within the framework of the WTO dispute settlement mechanism, he said in a statement.
India, one of the biggest trading partners of the U.S., has struggled to sign a trade deal with Washington at least partly because of the Section 301 investigations into lax enforcement of forced labor bans and excess industrial capacity.
"The Brazil case ... is a warning for India," said Ajay Srivastava, founder of the Global Trade Research Initiative think tank. "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."
Secretary of State Marco Rubio, who was accused by Lula of being anti-Latin America when the U.S. tariffs were proposed in June, blamed the Brazilian president and said "Lula and his government have not negotiated with the US in good faith."
"For the past year, 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," Rubio said in a strongly worded post on X.
In a Thursday statement, Brazil's Foreign Affairs Minister Mauro Vieira called Rubio's remarks unacceptable and offensive to the Brazilian government and people, adding Lula had sought dialogue throughout the process.
"Rubio launched a rude and arrogant attack on the head of state of a friendly country," he said.
Vieira also reiterated Brazil's willingness to negotiate despite Washington's "political motivation" in imposing the measure, saying there was no logic behind it.
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