U.S. and WTO delegates from Brazil engaged in discussions concerning import taxes (tariffs)
The World Trade Organization (WTO) has accepted Brazil's request to enter into consultations with the United States on August 15, aiming to seek a negotiated solution before moving into arbitration. This development comes amidst escalating trade tensions between the two countries, triggered by tariffs imposed by former President Donald Trump on Brazilian exports.
The US stands ready to confer with Brazilian officials on a mutually convenient date for consultations, following Brazil's approach to the WTO in early August. However, a letter from the US to the WTO warned that some issues raised by Brazil are issues of national security not susceptible to review or capable of resolution by WTO dispute settlement.
The tariffs imposed by Trump were some of the highest as punishment for a perceived "witch hunt" against former Brazilian President Jair Bolsonaro. The order claimed that Brazil's recent policies and actions posed a threat to the US economy, national security, and foreign policy. As a result, Trump imposed duties on more than a third of US-bound exports from Brazil, including coffee, beef, and sugar.
It is unclear, however, who met on August 15 with Brazilian representatives in the WTO consultation process regarding these tariffs. The details of these discussions remain undisclosed, leaving the outcome of the consultations uncertain.
Despite the escalating trade tensions, it is worth noting that the US runs a trade surplus with Brazil, not a deficit. This means that the US exports more goods and services to Brazil than it imports.
In a separate development, President Bolsonaro is currently on trial for allegedly plotting to attempt a coup. The trial, which began in January 2021, has not been linked to the ongoing trade disputes between the US and Brazil.
As the consultations continue, both countries will be under pressure to find a resolution that benefits both their economies and maintains the integrity of the WTO's dispute settlement process. The outcome of these consultations could have far-reaching implications for the global trade landscape.
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