MercoPress. South Atlantic News Agency

Brazil turns to WTO to seek remedy to US tariffs

However, the move is purely symbolic; no results are expected

Brazil formally challenged recent US tariffs by requesting consultations on Wednesday with the World Trade Organization (WTO). The tariffs, which impose up to a 50% surcharge on a wide range of Brazilian products, were implemented by two executive orders from President Donald Trump.

The Brazilian government argues that the tariffs violate fundamental WTO principles, including the most-favored-nation one and the agreed-upon tariff caps. Despite Brazil's express willingness to negotiate, experts view the WTO appeal as a largely symbolic act.

The consultation is the first step in the WTO's dispute settlement process, and if no agreement is reached, Brazil could request the establishment of a formal panel to investigate the matter. President Luiz Inácio Lula da Silva has also stated his intention to discuss a joint response with other BRICS nations.

Trump issued an Executive Order on April 2 entitled “Regulation of imports with a reciprocal tariff to correct trade practices that contribute to the United States' high and persistent annual trade deficits in goods,” to address trade deficits, and a second, dated July 30, called “Addressing Threats to the United States by the Government of Brazil,” establishes tariffs of up to 50% on a wide range of Brazilian products.

According to the Brasilia, the tariffs violate commitments made by the US at the WTO, including the most-favored-nation principle and tariff ceilings negotiated within the framework of the organization. The most-favored-nation principle requires WTO members to grant the same tariff treatment to all member countries, while tariff ceilings limit the taxes applicable to imports.

However, Brazil's latest steps are regarded to be of a pure symbolic nature with no actual results expected. Similar requests have been shelved there since the pandemic.

Also on Wednesday, Trump issued an executive order imposing a 25% surcharge on Indian products, arguing that the country directly or indirectly imports Russian oil. As a result, the tariff on Indian products reaches 50%, the same rate as fellow BRICS member Brazil.