The U.S. Trade Representative (USTR) announced on July 17 a Section 301 investigation into Brazil's agricultural trade practices-an aggressive move that could ultimately justify trade sanctions. The decision follows mounting pressure from American agricultural groups frustrated by what they call unfair Brazilian trade tactics.

The probe will scrutinize illegal deforestation, tariff policies, intellectual property violations, import restrictions on U.S. ethanol, and alleged censorship of U.S. tech companies operating in Brazil.

A key concern is that illegal land clearing gives Brazilian farmers an artificial edge by expanding cropland and pasture at low cost. "Agricultural production-especially soy and cattle-has been a major driver of deforestation in Brazil," the USTR stated.

Brazil is the world's top exporter of soybeans, coffee, sugar, orange juice, and oranges, and ranks second in beef production, behind the U.S. When U.S. ag exports are blocked by foreign powers like China, Brazil often fills the gap.

Despite a general trade surplus with Brazil, the U.S. posted a $7 billion agricultural trade deficit with the country last year, according to the USDA's Foreign Agricultural Service. This imbalance is further strained by a series of tariffs:

10% tariffs on U.S. apples, cherries, and pears

10% tariffs on frozen fruits and vegetables

18% tariff on U.S. ethanol, imposed in 2024

18% tariff on frozen French fries

These duties have become a major barrier for U.S. food and fuel exports to Brazil, say industry groups like the Northwest Horticultural Council and the American Frozen Food Institute.

In a social media post, USTR emphasized the need to hold Brazil accountable: "The Section 301 investigation will ensure American companies are treated fairly."

Livestock groups are also concerned about the reintroduction of foot-and-mouth disease via Brazilian beef imports. Critics argue that Brazil's environmental enforcement is too weak to prevent loterm biosecurity threats.

While President Trump has vowed a 50% tariff on Brazilian goods starting August 1, trade officials clarified that the Section 301 process will not conclude by then. However, it could lay the legal groundwork for future sanctions.

Brazil's actions have also sparked political tension. In a July 9 social media post, Trump criticized Brazil's treatment of former president Jair Bolsonaro, calling it a "witch hunt." While this issue was not included in the USTR's formal investigation, it reflects rising diplomatic friction between the two major ag exporters.