Brazil challenges legitimacy of US trade probe, urges dialogue

BRASILIA/SAO PAULO: Brazil submitted its formal response to a U.S. trade investigation on Monday, rejecting the allegations while challenging the legitimacy of the probe itself.

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Brazil criticised the US for launching a unilateral trade investigation and called for dialogue through the WTO framework.
The US probe targets Brazil's digital trade and tariffs, claiming they harm US commerce.
Brazil defended its practices, including its ethanol market and Pix system, and denied any discrimination or burden on US trade.

While calling for "constructive dialogue," the Brazilian government stated that it does not recognize Washington's authority to launch the unilateral investigation.

The probe, initiated in July under Section 301 of the Trade Act of 1974, aims to determine whether Brazil's policies on digital trade and tariffs are "unreasonable or discriminatory and burden or restrict" U.S. commerce, according to U.S. Trade Representative Jamieson Greer.

This action adds to growing friction between the two countries, including 50% tariffs imposed by the administration of U.S. President Donald Trump on imports of Brazilian goods and U.S. sanctions targeting a Brazilian Supreme Court justice.

In its 91-page response, Brazil refuted U.S. arguments concerning its trade practices, including its ethanol market and the popular digital payment system, Pix. The government argued Brazil's acts, policies and practices are not unreasonable, discriminatory or burdensome to U.S. commerce.

Brasilia also objected to the investigation taking place outside the legal framework of the World Trade Organization (WTO). The government has already requested consultations at the WTO over the U.S. tariffs.

The office of the USTR did not immediately respond to a request for comment.

"Brazil reiterates its long-standing position that Section 301 is a unilateral instrument inconsistent with the principles and rules of the multilateral trading system," Latin America's largest economy said.