Brazil has strongly rejected a trade investigation launched by the United States, calling the probe illegitimate and unfair. On Monday, the Brazilian government submitted a lengthy 91-page response, firmly denying the U.S. accusations.
The investigation was opened under a U.S. law known as Section 301 of the Trade Act of 1974. It is meant to determine whether Brazil’s digital trade rules and tariff policies are harmful to American companies. U.S. officials argue that these rules could be “unreasonable or discriminatory.”
Brazil, however, says it does not accept Washington’s authority to carry out such a probe on its own. Officials stressed that the U.S. has no legal right to judge their trade policies without following international trade rules.
The response also made it clear that Brazil is open to talking, but only in a fair and balanced setting. The government said it wants “constructive dialogue” and cooperation, instead of unilateral actions from the United States.
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Section 301 is a U.S. law that lets Washington investigate and act against trade practices it sees as unfair. It allows the government to impose tariffs or restrictions without first going through global trade bodies. Brazil argues this makes the process one-sided, since disputes should be handled by the World Trade Organization, where rules are applied equally to all members.
Dispute Over Trade Rules and Digital Payments
The U.S. investigation questions several Brazilian trade practices, including policies in its ethanol market and the country’s popular instant payment system, known as Pix. According to Washington, these practices could be blocking fair competition for American businesses.
Brazil strongly disagreed. In its official statement, the government said that its acts, policies, and practices are not unreasonable or discriminatory. It also argued that they do not place a burden on U.S. commerce.
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Pix, in particular, has become a central point of discussion. The payment system is widely used across the country, helping millions of people transfer money quickly and easily. U.S. officials have suggested that it may disadvantage foreign payment services. Brazil dismissed this claim, insisting that Pix was designed to improve financial inclusion and is not aimed at excluding foreign companies.
Ethanol is another point of contention. Both the nations are major producers and exporters of the fuel. Washington claims local policies make it harder for American ethanol to compete. Officials countered this, saying the rules follow international standards and are not designed to block foreign suppliers.
Growing Trade Friction Between the Two Countries
The disagreement comes at a time of growing trade friction between the two largest economies in the Americas. Recently, the U.S. government imposed tariffs of 50 percent on certain Brazilian goods. The country has already brought this issue to the World Trade Organization (WTO), requesting formal consultations.
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Adding to the strain, Washington also placed sanctions on a Brazilian Supreme Court justice. This step deepened political and diplomatic tensions, adding to the ongoing trade fight.
Brazil’s response to the Section 301 probe made it clear that the government views unilateral U.S. investigations as inconsistent with global trade rules. Officials reminded that the WTO exists to handle disputes between countries and that bypassing it weakens the multilateral system.
“Brazil reiterates its long-standing position that Section 301 is a unilateral instrument inconsistent with the principles and rules of the multilateral trading system,” the statement read.
For now, the U.S. has not responded publicly to Brazil’s filing. The office responsible for trade in Washington declined to comment immediately.