In a request for dispute consultations circulated to WTO members on July 30, Brazil said the US had imposed tariffs beyond its normal customs duties following two investigations conducted under Section 301 of the US Trade Act of 1974.
According to Brazil, the measures include an additional 25% tariff on most products imported from Brazil following a Section 301 investigation, as well as an additional 12.5% tariff on certain Brazilian goods under a separate Section 301 probe into allegations of forced labour. Both sets of tariffs are subject to specified exemptions.
Brazil argued that the measures are inconsistent with multiple provisions of the WTO’s General Agreement on Tariffs and Trade (GATT) 1994 and the WTO’s Dispute Settlement Understanding.
The request for consultations marks the formal start of a WTO dispute. The consultation process gives both sides up to 60 days to try to resolve the matter through negotiations. If no settlement is reached, Brazil can ask the WTO to establish a dispute panel to rule on the case.
The United States launched two Section 301 investigations covering alleged forced labour practices and excess industrial capacity. The forced labour investigation has already resulted in additional tariffs of 10% on imports from India and 16 other countries, while goods from 43 countries face tariffs of 12.5%.
The outcome of the US investigation into excess capacity is still awaited. India, China and several European Union members have questioned the legitimacy of the probe, arguing that such unilateral investigations may not be consistent with WTO rules.