Brazil Condemns New 25% U.S. Tariff as Trade Dispute Escalates

Washington cites unfair trade practices; Brasília calls the move baseless as an additional forced-labor duty looms.

The United States imposed a 25% tariff on most Brazilian goods this week, citing what it called unfair trade practices by the South American country, CNBC reported. A separate U.S. investigation into forced-labor enforcement could add another 12.5% duty on top of that, with a decision expected next week, according to CNBC.

Brazil's government rejected the U.S. findings outright. "The Brazilian government repudiates the decision announced today by the United States government regarding the imposition of 25 percent tariffs on Brazilian products," the office of President Luiz Inácio Lula da Silva said in a statement on social media, according to the Guardian, denying that Brazil had engaged in unfair trade practices.

Secretary of State Marco Rubio defended the move, saying Lula's policies were "bad for Americans and bad for Brazilians," the Guardian reported.

The dispute marks a sharp deterioration in trade relations between Washington and one of Latin America's largest economies. The prospect of a combined 37.5% tariff, should the forced-labor duty be added, would represent one of the steepest U.S. trade penalties imposed on a major trading partner this year.

Neither side signaled willingness to back down in the reporting available, with Brasília framing the tariffs as unjustified and Washington standing by its trade-practices findings. The additional forced-labor determination due next week is likely to be closely watched as a further test of the relationship.

— Compiled from reporting by CNBC and the Guardian.