Brazil maintains that it complies with multilateral norms and that the U.S. has a historical surplus in bilateral trade. The government asserts that unilateral measures provided for in Section 301 would be illegitimate and contrary to WTO rules.
The Brazilian government officially submitted its response to the Office of the U.S. Trade Representative (USTR) this Monday (18) in the investigation opened under Section 301 of the Trade Act of 1974.
In the document, Brazil states that it does not adopt discriminatory, unjustifiable, or restrictive policies regarding trade with the U.S. and that there is no legal or factual basis for the imposition of sanctions.
The investigation was initiated in July at the request of President Donald Trump's government, which claims that Brazilian policies harm American companies in areas such as digital payment systems (PIX), ethanol, intellectual property, and environmental policies related to deforestation.
In its response, Brazil listed an explanation for each topic of the U.S. accusation and calls for "constructive dialogue."
"Brazil urges the USTR to reconsider the initiation of this investigation and to start a constructive dialogue. Unilateral measures provided for in Section 301 could undermine the multilateral trade system and have adverse consequences for bilateral relations," wrote the Brazilian government.
Should the U.S. body conclude that there are unfair practices, the Trump government could impose more tariffs on Brazilian products.
The U.S. government's action occurs in the context of the 50% tariff imposed by Trump on a series of Brazilian products, practically making exports of these items unfeasible.
In announcing the tariff increase, Trump criticized decisions of Brazil's Supreme Federal Court: the case against former President Jair Bolsonaro (an ally of the U.S. president) for attempting a coup; and measures to align social media companies (American) with Brazilian law.
Brazil saw ideological motivations in Trump's tariff increase but decided not to retaliate and to maintain negotiations.
See below what Brazil said about the topics of the U.S. accusation:
General argument from Brazil
In the statement sent to the USTR, Itamaraty defended that bilateral trade is mutually beneficial and that the United States has a historical surplus in the relationship. Brazil also emphasized that it has promoted reforms in sectors pointed out by the U.S. and that all are compatible with multilateral norms.
"There is no harm to American companies compared to companies from other countries," says the text. For the Brazilian government, unilateral measures such as tariffs would be illegitimate and contrary to World Trade Organization (WTO) rules.
PIX and intellectual property
Regarding PIX, the defense highlighted that the operational rules of the system aim for security, stability, and consumer protection, without discriminatory restrictions on foreign companies. Regarding intellectual property, Brazil argued that it complies with international standards and maintains regulatory frameworks in line with WTO agreements.
In defense of PIX, the government highlighted that the system increased the participation of Brazilians in the banking system and was praised by entities such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD). The document also highlights that PIX increased competition in the electronic payments market, leading to greater participation of private companies in the field, including American companies.
The Brazilian government also highlighted that other countries have adopted initiatives similar to PIX, such as the European Union, India, and even the United States. According to the document, a system called FedNow, offered by the American central bank, "provides functionalities similar to PIX."
"The participation of over 900 payment service providers in PIX demonstrates the effectiveness of the approach of the Central Bank of Brazil. Additionally, the participation framework of PIX — which includes business models such as payment initiation — creates opportunities for large technology companies interested in operating in the system. Notably, payment initiation by third-party providers has been growing at a monthly rate of 25% this year, with Google Pay being the largest initiator, processing approximately 1.5 million transactions via PIX last month," states the Brazilian government in the response.
Response regarding the STF
The government claims that no STF decision or court order related to the issue results in discriminatory measures that harm the fundamental rights of any party or the ability of American companies to compete in Brazil or the global market.
"In summary, none of the allegations regarding the STF's decision or the underlying court orders result in discriminatory measures that unduly affect the fundamental rights of any party or the ability of American companies to participate competitively in Brazilian or global markets."
Brazil reinforced that the use of fines and coercive measures to ensure compliance with the law is a standard judicial practice in any country with the rule of law, including the United States.
The document highlights that it is normal practice for national legislations to establish formal requirements for the operation of foreign companies in their territory, aiming at issues of legal responsibility.
In other words, Brazil argues that Article 19 is not a barrier directed against U.S. companies, but a general norm for all operating in the country.
According to the response, the objection raised by the U.S. seems to target Brazil's legitimate efforts to balance fundamental rights and combat online crimes, according to its legal system and social values.
Therefore, this is not a discriminatory conduct against American trade — a necessary condition for the application of punitive measures under Section 301.
Ethanol and the environment
In the case of ethanol, the government stated that it adopts policies compatible with multilateral commitments and recalled that the country practices "zero tariffs" for aeronautical products, referring to the rules applied to the aviation industry.
Regarding deforestation, Itamaraty argued that Brazilian environmental policy does not constitute a trade barrier nor restrict the competitiveness of American companies.
CNI and Embraer also speak out
In addition to the government, the National Confederation of Industry (CNI) and Embraer submitted parallel statements to the investigation. CNI stated that there is no legal or factual basis for restrictive measures and recommended that disagreements be resolved through bilateral dialogue and technical cooperation.
Embryer also highlighted its relevance in the American market, noting that one-third of flights at Ronald Reagan National Airport in Washington are operated with aircraft from the Brazilian company. The company also emphasized its contribution to the defense and air mobility of the U.S. and classified any tariffs against its products as "contrary to American interests."
Next steps
The process is still under review by the USTR. A public hearing is scheduled for September 3, when representatives from companies, entities, and governments will be able to present additional arguments. Until then, political pressure is expected to continue to grow, with the risk of new tensions in bilateral trade.