The Office of the U.S. Trade Representative (USTR) released preliminary findings on June 1 and 2, 2026, in two investigations conducted under Section 301 of the Trade Act of 1974 that may affect Brazilian exports to the U.S.

In the first investigation[1], the USTR concluded that certain Brazilian acts, practices, and policies related to digital trade and electronic payment services; preferential tariffs; anti-corruption enforcement; intellectual property protection; ethanol market access; and illegal deforestation would be unreasonable or discriminatory and would burden or restrict U.S. trade. In view of this, the USTR proposed the application of an additional tariff of 25% on goods originating in Brazil, with certain exceptions.

In the second investigation[2], concerning the alleged failure of 60 economies to restrict the import of goods produced with forced labor, Brazil was included among the countries that, according to the USTR, would not have adopted sufficient measures to prevent the import of goods produced with forced labor. For this group, the USTR proposed an additional tariff of 12.5%, also subject to exceptions.

These conclusions are not yet final and have not entered into force. In the case of the investigation into Brazilian practices, the USTR opened a public consultation, with a deadline for submission of written comments until 07/01/2026 and a public hearing scheduled for 07/06/2026. The legal deadline for possible adoption of measures is 07/15/2026. In the investigation on forced labor, written comments may be submitted until 07/06/2026 and the public hearing is scheduled for 07/07/2026.

Section 301 Overview

Section 301 corresponds to the set of provisions of §§301 to 310 of the Trade Act of 1974, known as “Relief from Unfair Trade Practices”. This is a U.S. trade policy instrument that gives the USTR powers to investigate and take action in response to foreign practices deemed unjustifiable, unreasonable, or discriminatory and that burden or restrict U.S[3]. trade.

An investigation under Section 301 may be initiated when U.S. rights under a trade agreement are being denied or when foreign government act, policy, or practice are burdening or restricting U.S. trade. The investigation may result from a petition filed by an interested party or be initiated ex officio by the USTR, after consultation with the public and private entities affected by the investigation.

Once initiated, the procedure is conducted by the Section 301 Committee, a technical body subordinate to the USTR’s Trade Policy Staff Committee, which reviews petitions, holds public hearings and formulates recommendations. After the analysis, the USTR may decide to adopt measures such as tariffs (preferably) or other import restrictions, suspension of trade concessions or entering into a binding agreement with the foreign government to cease the practice or compensate the U.S.

Unlike the “reciprocal tariffs” previously adopted under the International Emergency Economic Powers Act (IEEPA), which were later invalidated by the U.S. Supreme Court, on the understanding that the IEEPA does not empower the President to impose tariffs, Section 301 tariffs follow their own procedure, with an investigative step, consultations, and the possibility of stakeholder participation.

Tariffs under Section 301 have been used previously during the first Trump Administration, with emphasis on the application of specific tariffs against China, in the context of the trade war between the two countries[4]. More recently, after the invalidation of the tariffs adopted under the IEEPA by the Supreme Court, Section 301 has come to be considered one of the possible legal bases to partially recompose the U.S. tariff agenda.

Investigation into Brazilian trade practices[5]

The specific investigation against Brazil was initiated on 07/15/2025 and focused on six main axes: digital trade and electronic payment services; preferential tariffs, anti-corruption enforcement, intellectual property protection, ethanol market access, and illegal deforestation. According to the USTR, more than 295 comments and submissions were received, in addition to the holding of a public hearing on 09/03/2025.

In summary, the preliminary report concluded that:

  • Digital trade and electronic payment services: according to the USTR, the Central Bank of Brazil would act simultaneously as a regulator and operator of Pix, which would create a conflict of interest and favor this system to the detriment of U.S. electronic payment companies. The Brazilian government, in turn, stated that Pix is a public and free infrastructure for instant payments, operated by the Central Bank, whose rules apply uniformly and neutrally. The active participation of U.S. companies in the Brazilian payments’ ecosystem was also reinforced.
  • Preferential tariffs: The USTR criticized Brazilian trade agreements, especially involving Mexico and India, arguing that certain products from these countries would receive more favorable tariff treatment than U.S. products, in sectors where the U.S. would also be competitive. The Brazilian government responded that the agreements entered into by Mercosur with third countries do not restrict the access of U.S. products to the Brazilian market and that inputs and components of U.S. origin incorporated into Brazilian products can also benefit from Mercosur agreements with other markets.
  • Anti-corruption: the USTR maintained that Brazil had not adopted sufficient measures to enforce anti-corruption rules, citing concerns raised by international organizations and decisions related to “Operação Lava-Jato”. The Brazilian government stated that the country is part of the main international instruments to combat corruption and has a consistent legal and institutional framework, regularly evaluated by multilateral mechanisms.
  • Intellectual property protection: The USTR stated that certain Brazilian practices would not adequately and effectively protect intellectual property rights, burdening U.S. sectors intensive in innovation and creativity, citing concerns related to the import, distribution, sale, and use of counterfeit goods, illicit streaming devices, among others. The Brazilian government disputed this conclusion, indicating that the U.S. would be the main beneficiary of the Brazilian intellectual property system, accounting for about 30% of patent applications and leading licensing and assignment agreements.
  • Ethanol market access: The USTR evaluated whether Brazilian tariffs or regulations would discriminate against or harm U.S. producers of ethanol, biofuels, or related products due to the existence of alleged tariff barriers to foreign biofuel imports. The Brazilian government maintained that the National Biofuels Program is open to foreign producers under non-discriminatory conditions and that the National Agency of Petroleum, Natural Gas and Biofuels has developed specific technical guidelines for the participation of U.S. producers in the program.
  • Illegal deforestation: The USTR analyzed whether Brazil had sufficient laws and regulations to address illegal deforestation, including in agricultural and timber chains exported to the U.S. or other markets. The Brazilian government responded that, since 2023, it has set a goal of zero deforestation by 2030 and stated that deforestation in the Legal Amazon has been reduced by about 50% compared to 2022.

Considering the preliminary findings that all these Brazilian measures would be actionable under Section 301, the USTR proposed the application of an additional 25% tariff on products originating in Brazil. The proposal has the potential to have a relevant impact on Brazilian exports to the US, although it contains an extensive list of exceptions.

Excluded product categories include beef, coffee, rare earths, certain metals and ores, aircraft and aircraft parts, fruits and nuts, crude oil and derivatives, pharmaceutical compounds, organic chemicals, and fertilizers.

The existence of these exceptions suggests that, although the proposal has a broad scope, products considered sensitive or strategic for North American production chains were preserved from the proposed surcharge. Even so, sectors not included in the exclusion list may be subject to a relevant increase in the cost of access to the North American market if the measure is confirmed.

The Brazilian government reacted contrary to the preliminary conclusions. In an official statement released on 06/02/2026, it stated that “there was and there is no justification” for unilateral measures against Brazil, expressly mentioning Pix and maintaining that Brazilian trade policy does not discriminate against or harm US trade. The government also pointed out that, according to statistics from the Bureau of Economic Analysis, the U.S. has accumulated $424.5 billion in surplus of goods and services with Brazil in the last 15 years, and that 76% of imports originating in the U.S. would have entered Brazil without paying import taxes in 2025.

Interested parties will be able to submit comments on the proposed measure until 07/01/2026, including the scope of the tariff and the products excluded. A new public hearing is scheduled for 07/06/2026, and the legal deadline for possible adoption of response measures is 07/15/2026, 12 months after the beginning of the investigation.

Forced labor investigation[6]

On 06/02/2026, the USTR released a preliminary determination in an investigation initiated to investigate the alleged failure of different economies to effectively impose and enforce import bans on goods produced with forced labor.

The investigation was initiated on 03/12/2026 and covers 60 economies. According to the USTR, almost 500 comments and manifestations were received, in addition to the participation of almost 60 parties in a public hearing. After reviewing the information received, the USTR concluded that all the economies investigated had failed, to some degree, to effectively impose and enforce a ban on the import of goods produced with forced labor.

The proposed measures were divided into two categories. For economies that impose a ban on the import of goods produced with forced labor, have made commitments related to the issue in trade agreements, or have adopted partial regimes with the effect of preventing certain imports, the USTR has proposed an additional tariff of 10%. For the other 54 economies, including Brazil, that would have failed to effectively impose and enforce a ban on the import of goods produced with forced labor, the USTR proposed an additional tariff of 12.5%. The proposal also provides for exceptions, in addition to a specific mechanism for textiles.

In the Brazilian case, this investigation should be followed together with the specific investigation into Brazilian trade practices, as both can affect the cost of access of products originating in Brazil to the North American market. If confirmed, the proposed tariffs could be added or interact in practice, depending on how any final decision comes to discipline the application of the measures and the exceptions effectively maintained.

The Brazilian government disputed the preliminary conclusions of the investigation. In an official statement, it expressed “deep disagreement” with the USTR’s preliminary conclusion, stating that the issue was being used as a justification for unilateral protectionist measures. The note maintained that Brazil is recognized by the International Labor Organization as an international reference in the fight against forced labor and that the Brazilian customs authorities have the legal competence to deny entry and confiscate foreign goods contrary to public morals, good customs, public health or public order, which would include goods produced, in whole or in part, with forced labor.

Interested parties will be able to submit comments until 07/06/2026, and a public hearing is scheduled for 07/07/2026. The legal deadline for possible adoption of measures is 03/12/2027.

[1] USTR, Notice of Determination and Request for Comments Concerning Action Pursuant to Section 301: Brazil’s Acts, Policies, and Practices Related to Digital Trade and Electronic Payment Services; Unfair, Preferential Tariffs; Anti-Corruption Enforcement; Intellectual Property Protection; Ethanol Market Access; and Illegal Deforestation.

[2] USTR Makes Findings and Proposes Action in 60 Section 301 Investigations Relating to Failures to Take Action on Trade in Forced Labor Goods.

[3] Congressional Research Service, Section 301 of the Trade Act of 1974, IF11346.

[4] CFR, What’s Next for Trade and Tariffs

[5] This section has been prepared based on USTR, Notice of Determination and Request for Comments Concerning Action Pursuant to Section 301: Brazil’s Acts, Policies, and Practices Related to Digital Trade and Electronic Payment Services; Unfair, Preferential Tariffs; Anti-Corruption Enforcement; Intellectual Property Protection; Ethanol Market Access; and Illegal Deforestation and SECOM, Preliminary Conclusion of Section 301 Investigation

[6] This section has been prepared based on USTR, Notice of Determinations and Request for Comments Concerning Actions in Section 301 Investigations of Acts, Policies, and Practices of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor and SECOM.