MercoPress. South Atlantic News Agency

Brazilian industry estimates nearly half its US exports will face additional tariffs

The study, released on Thursday, details that the new 12.5% rate reaches 4,060 Brazilian products

Some 48.7% of Brazilian exports bound for the United States will be subject to some form of additional tariff following the entry into force of the new forced-labor levy, according to a study by the National Confederation of Industry (CNI), the country's main industrial employers' body.

The study, released on Thursday, details that the new 12.5% rate reaches 4,060 Brazilian products. Of those, 3,985 were already subject to the 25% surcharge in force since Wednesday and will now pay a total of 37.5% to enter the US market. That group accounts for 80.7% of affected exports, some $10.8 billion. Another 75 products, worth $1.6 billion, will be covered only by the new rate. Together, the measure covers $12.4 billion, equivalent to 29.4% of Brazilian sales to that destination.

The new levies stem from the investigation conducted under Section 301 of US trade law, which covered 60 trading partners. In its final determination, the Office of the US Trade Representative (USTR) included Brazil among the countries that, in its assessment, “failed to impose and effectively enforce a ban” on the import of goods produced with forced labor.

The CNI challenged that rationale. According to the confederation, the justifications presented by the USTR do not reflect Brazilian reality, since the country has some of the most advanced legislation to prevent and eradicate forced labor across supply chains, with internationally recognized mechanisms for inspection, accountability, and worker protection.

“It is essential that dialogue between Brazil and the United States be maintained and deepened. At the same time, we need to act quickly to soften the impact on the affected companies,” the body's president, Ricardo Alban, said in a statement, adding that they are holding talks with the federal government and with the most affected sectors to define short-term measures.

The Brazilian government called the tariffs improper and signaled a response. President Luiz Inácio Lula da Silva said the country would not sit lamenting the measure and announced a credit line for the sectors involved.

Brazil ended up in the highest band of the new scheme, while Argentina secured the minimum 10% rate through commitments made in its bilateral agreement with Washington to ban such imports. The tariff round, covering about 99% of US imports, was applied under a different instrument from the levies the Supreme Court struck down in February, when it found the administration had exceeded its authority by invoking an emergency powers law.