Brazil’s rebuttal disputes every part of the Section 301 finding, but its stated remedies run through a dispute system that cannot deliver.
Brazil has published a heading-by-heading rebuttal of the United States case against it and begun preparing countermeasures, after Washington imposed 25 per cent tariffs on Brazilian goods at the close of a year-long section 301 investigation.
The duties applied from Wednesday to all imports from Brazil except those listed in the annex to the notice of action, with goods already in transit given until July 29. Exemptions cover beef, coffee, orange juice, aircraft and aircraft parts, energy products, vaccines, minerals, fertilisers and auto parts, largely tracking the list published with the proposed action on June 1.
The federal government’s defence document, issued on July 16 and posted by the Development, Industry and Trade ministry, works through the six categories in the investigation and adds three of its own. Its opening position is that no unilateral measure is warranted at all: by Washington’s own statistics, the note says, the United States has run a cumulative $424.5bn surplus in goods and services with Brazil over 15 years, and the two sides have met more than 30 times since July 2025.
That figure is rhetorically powerful and legally beside the point. Section 301 turns on whether a partner’s acts, policies or practices are unreasonable and burden US commerce, not on the balance of trade, so a surplus does not answer the finding. It does, however, sit awkwardly with an administration that has justified most of its other tariff actions in deficit terms.
The strongest passages are the ones where Brazil turns US material against the case. On intellectual property, the note observes that Washington’s own Special 301 report removed Brazil from the priority watch list. On anti-corruption, it argues that USTR relied on an OECD assessment published in 2023, covering the previous government, when the OECD’s more recent work reaches a different conclusion, and that Transparency International’s Brazil retrospective of February 2026 records advances in tackling corruption, money laundering and organised crime.
On ethanol, Brazil defends its 18 per cent applied tariff as within its WTO bindings and non-discriminatory, then makes the sharper point: it offered to negotiate ethanol and sugar together, where US over-quota duties beyond a 150,000-tonne allocation approach 100 per cent, and says Washington never replied.
Other sections are weaker. The deforestation defence rests largely on comparison with the previous administration rather than on absolute levels, citing falls of more than 50 per cent in forest degradation since 2023. The timber section asserts flatly that there is no possibility of Brazilian exports having illegal origin, a claim strong enough to be unfalsifiable, resting on Ibama and Receita Federal chain-of-custody checks before shipment. On preferential tariffs, Brazil invokes the flexibilities available to developing countries for the Mercosur agreements with India and Mexico, and notes the asymmetry of the complaint: Washington’s own agreement with Mexico is considerably more comprehensive.
The remedies are where the difficulty lies. Brazil says it will immediately begin procedures under the Reciprocity Law, passed unanimously by Congress, which permits countermeasures where a partner denies benefits or breaches trade commitments, and can extend to suspending intellectual property obligations and investment treatment as well as raising duties. It will also reinforce the Sovereign Brazil plan for affected sectors.
Alongside that, it will take the matter back to the WTO. This is the part that will not do the work asked of it. Brazil already has a dispute on foot, requested in August 2025, but that case targeted the earlier 10 and 40 per cent duties imposed under emergency powers, which the Supreme Court struck down in February. The measures now in force rest on a different statute, so resuming the dispute means fresh consultations rather than reviving the old ones. Even then, a panel report can be appealed into a vacant Appellate Body. Brazil participates in the interim appeal arrangement; the United States does not.
Washington’s account of the breakdown is simpler. Marco Rubio, secretary of state, said Brazil had failed to negotiate in good faith across months of meetings and that “Lula has put his own ego ahead of making a deal”.
Brazil goes to the polls in October, and the presidency’s communications office framed the tariffs as the product of collaboration by the Bolsonaro family, language absent from the trade ministry’s more technical note. For exporters the question is narrower and more immediate: whether the exemption annex holds through the first weeks of collection, and what the Reciprocity Law list looks like when it appears.