In retaliation for the way the United States has treated its cotton exports, the Brazilian government has raised import duties on an extensive list of goods, including tires. And the World Trade Organization (WTO) has authorized the sanctions, which could total as much as $829 million.
The “retaliation level” is the second highest in the history of the WTO, according to a press release from Brazil’s Chamber of External Trade (CAMEX). “It results from the U.S. non-compliance with the rulings of WTO panels and its Appellate Body, which confirmed four times that the U.S subsidies to Brazilian cotton producers and exporters breached multilateral trade disciplines.
“The authorized countermeasures may remain in effect as long as the United States persists in the current situation of non-compliance with those disciplines,” according to the release.
Tariffs on passenger tire exports from the U.S. to Brazil will be increased from 16% to 32% by April 7. They will be raised the same amount on “other new pneumatic tires, of rubber, of a kind used for buses and lorries,” under Brazil’s NCM tire code (which closely follows the Harmonized Commodity Description and Coding System, or HS Code, in the U.S.).
“The Brazilian Government regrets having to take these measures, since it believes that trade retaliation does not constitute the most appropriate means to attain international trade on a fairer basis,” said the CAMEX release.
“However, after almost eight years of litigation and over four years of continuing non-compliance with the rulings of the (WTO’s) Dispute Settlement Body on the part of the United States, and in the absence of the offering of concrete and realistic options that could allow for the negotiation of a satisfactory solution to the dispute, it remains for Brazil to exercise its right, as authorized by the WTO.”
CAMEX says Brazil remains open to a dialogue with the U.S. “that may facilitate the achievement of a mutually satisfactory solution to this dispute.”
A U.S. government spokesperson says that for U.S. manufacturers and distributors selling to Brazil, “ this will increase their prices to their customers and could result in a decrease in sales.”
For more information on the tariffs and the goods affected, click on the CAMEX release (a link to the English translation is at the bottom of the page).