In a request for dispute consultations circulated to WTO members on July 30, Brazil stated that the US imposed tariffs exceeding its standard customs duties following two investigations conducted under Section 301 of the US Trade Act of 1974.
Brazil indicated that the actions involve a 25% extra tariff on most products imported from Brazil, resulting from a Section 301 investigation, along with a 12.5% additional tariff on specific Brazilian goods from a different Section 301 inquiry into forced labour allegations. Both tariffs come with designated exemptions.
Brazil contended that these actions contradict several provisions of the WTO’s General Agreement on Tariffs and Trade (GATT) 1994 and the WTO’s Dispute Settlement Understanding.
The request for consultations signifies the official commencement of a WTO dispute. This consultation phase allows both parties up to 60 days to attempt to resolve the issue through negotiations. If an agreement is not achieved, Brazil may request the WTO to form a dispute panel to adjudicate the matter.
The United States initiated two Section 301 inquiries examining alleged forced labour practices and excessive industrial capacity. The investigation into forced labour has already led to added tariffs of 10% on imports from India and 16 other nations, while products from 43 countries are subjected to 12.5% tariffs.
The results of the US investigation into excess capacity are still pending. India, China, and various members of the European Union have expressed concerns about the validity of the inquiry, asserting that such unilateral investigations may not align with WTO regulations.
