US poised to conclude Brazil trade probe by June, risking new tariffs

The Trump administration is moving toward conclusions in a trade investigation that could impose fresh tariffs on Brazil, with preliminary findings expected as soon as early June. The investigation, formally known as a Section 301 review, has been underway since July 2025 and examines what American officials characterize as unfair Brazilian trade practices across multiple sectors. The US Trade Representative's office, led by Ambassador Jamieson Greer, is working toward a July 15 deadline, but sources familiar with the timeline say preliminary recommendations will likely surface about a month earlier, triggering a public comment period before a final report is issued.

The scope of the investigation is broad. It encompasses digital commerce and electronic payment systems—including scrutiny of the Pix instant payment platform, which American credit card companies claim receives preferential treatment from Brazil's central bank. The review also examines Brazilian tariffs on ethanol imports, intellectual property protections, anti-corruption enforcement, and illegal deforestation. Some of these complaints are longstanding grievances Washington has aired for years; others, like the focus on Pix, are newer. The investigation was initiated by Trump partly in response to what he called a "witch hunt" against former president Jair Bolsonaro, though the formal legal basis—Section 301 of the 1974 Trade Act—gives the US substantial latitude to impose sanctions.

What makes this investigation particularly consequential is its legal standing. Unlike the broad tariff increases Trump imposed last year, which a US Supreme Court ruling in February found to violate the International Emergency Economic Powers Act, Section 301 investigations rest on firmer legal ground. Sanctions imposed under this authority would be difficult to challenge successfully in court, making them potentially harder to reverse. Sources consulted by the reporting say the most likely outcome is that both preliminary and final recommendations will propose tariffs on Brazilian products, though the specific rates and product categories cannot yet be estimated. The decision to actually implement any sanctions would ultimately rest with Trump.

The timing compounds pressure on Brazil's government. Just days before this reporting, the US designated two major criminal organizations—the PCC and Comando Vermelho—as terrorist entities. Officials in Brasília and the private sector worry this designation will increase compliance costs and deter foreign investment. New tariffs under Section 301 would arrive on top of that blow, renewing Washington's pressure on President Lula's administration at a moment when the two governments had appeared to be moving toward better relations.

Ambassador Greer emerged as a particularly vocal skeptic during a May meeting between Lula's team and Trump's at the White House. He expressed frustration with how Brazil conducts commerce with the United States, and he was especially vocal about a standoff at the World Trade Organization over extending a moratorium on digital trade tariffs. Greer accused Brazil and Turkey of blocking an agreement on the issue. When Greer met virtually with Brazil's Development Minister Márcio Elias Rosa on May 19, both sides characterized the conversation positively, but Brazilian officials left frustrated by the lack of clarity about a one-month window Lula and Trump had supposedly given their teams to resolve trade differences.

The Section 301 process is proceeding on its normal schedule, according to sources, and does not appear to have been affected by Lula's request for more time to negotiate. One request Brazil did make was for a public comment period—a standard part of the process that would allow Brazilian companies and the government to respond to preliminary findings before a final determination is made. That period would likely occur between the June preliminary release and the July 15 final deadline.

This investigation is not the only trade action targeting Brazil. The USTR launched a separate review earlier this year examining whether products made with forced labor are entering the American market. That probe covers roughly 60 countries and was announced shortly after the Supreme Court struck down Trump's earlier broad tariffs. Experts view it as aimed partly at trade partners aligned with China. The Trump administration plans to accelerate that investigation, with conclusions coming faster than the traditional timeline would allow. For Brazil, caught between multiple investigations and new terrorist designations, the convergence of these pressures represents a significant economic and diplomatic challenge heading into the second half of 2026.