en.Wedoany.com Reported - The American Chemistry Council (ACC) stated that the United States should avoid a "massive tariff" response to Brazilian goods and called for expanded tariff exemptions on chemicals. Jason Bernstein, ACC's Director of Global Affairs for International Trade and Supply Chain, noted in a written response that the proposed comprehensive tariffs "could pose risks to both economies." He also emphasized that the Office of the United States Trade Representative (USTR) should promote targeted industry-specific approaches through the chemicals industry initiative with Brazil.
The USTR is set to decide on July 15 whether to impose new tariffs on Brazilian goods. Washington is currently considering two proposals targeting Brazil: one stemming from a Section 301 investigation would add a 25% additional tariff, while another investigation into forced labor practices could add an additional 12.5%. According to an assessment by the National Confederation of Industry of Brazil (CNI), these two measures combined would bring the cumulative tariff burden on affected products to 37.5%, an increase of 27.5 percentage points.
The ACC is calling for resolving the issue through industry agreements rather than comprehensive tariffs. Bernstein stated: "A response based on broad tariffs has the potential to disrupt the highly integrated supply chains that benefit U.S. manufacturing and our trade surplus with Brazil. [An industry approach] would be a more effective and durable way to address tariff disparities and non-tariff barriers while strengthening U.S. production and exports." The ACC also urged the USTR to establish a review mechanism to assess the unintended consequences of tariffs and to maintain and expand exemptions for critical raw materials and intermediates.
The ACC's position is based on trade data: the U.S. chemical industry has a trade surplus with Brazil of nearly $7 billion, and Brazil is the fifth-largest destination for U.S. chemical exports. The ACC warned that a combined tariff of 37.5% would raise input costs for U.S. manufacturers, potentially prompting companies to completely shift their sourcing away from the U.S., undermining the trend of using Brazilian raw materials to bring production back from Asia.
The American Chamber of Commerce in Brazil (Amcham Brazil) stated at the USTR hearing that additional tariffs "could shift trade in favor of Asian competitors, widen the U.S. trade deficit with those countries, and weaken U.S. economic and commercial influence in Brazil." The organization noted that in approximately 40% of product categories not exempted from the additional tariffs, Brazil supplies more than 20% of U.S. imports, including chemicals, metals, minerals, and food preparations. Amcham Brazil President Abrao Neto stated that both governments still have room to seek a negotiated solution, and imposing new tariffs would be harmful to both economies, negatively impacting U.S. production sectors and consumers. The organization called for a "concrete path" to advance bilateral negotiations to expand market access in certain areas, cooperate on critical minerals, extend the WTO moratorium on e-commerce, and simplify Brazil's patent review process.
The CNI stated that the proposed tariffs could affect nearly 4,200 Brazilian products, with annual exports valued at nearly $15 billion. Among the main products potentially subject to the 37.5% cumulative tariff, 62% are intermediate goods used as production inputs, with 11 products where Brazil is the primary supplier to the North American market. According to CNI President Ricardo Alban, of the 80 people registered to speak at the USTR hearing, 66 are expected to oppose the proposed measures.
The public hearing is the final stage of the USTR investigation, with the U.S. government's decision on whether to implement these measures set for July 15. As of press time, Abiquim, the Brazilian chemicals industry association, had not responded to a request for comment.
