In the letter sent by US President Donald Trump, to Brazilian President Luiz Inacio Lula da Silva (PT), in addition to instituting the 50%tariff, the White House head determined the immediate opening of a “section 301 investigation into Brazil.” But what does this mean and what can the consequences be?
Section 301 is a device of the American Trade Law established in 1974. It investigates possible unfair practices committed by foreign countries, which eventually affect US trade
The White House, from this mechanism, can investigate tariff policies, trade barriers, and digital restrictions – also cited in the letter directed to the Brazilian agent, stating that the Supreme Court (STF) “issued hundreds of secret and illegal censorship orders to US social media platforms, threatening them with fines of millions of dollars and expulsion from the Brazilian social media.
In practice, the section is a legal breach to press the investigated country, and may become a bargaining mechanism: the US imposes or threatens to impose sanctions in order to pressure that there is a political or economic change – in this case aiming to Brazil – which adapts to American interest.
The legislation indicates that the procedure should be conducted by the US commerce representative and that the country can impose corrective measures against trade practices, if considered unfair, instituting tariffs or sanctions against the investigated nation.
In addition to using the device to investigate Brazil itself in the 1980s, in addition to India, Japan and the European Union, the United States also resorted to section 301 to impose rates on Chinese products. In September 2019, Trump himself used the device to apply a Additional tariff, which reached 30% in some cases, about billions of dollars in products in China. The section was also applied against Beijing by former President Joe Biden.
Even though it is a provision of a fiscal law, sanctions can come in other ways
HAS Gazeta do Povothe economist and PhD in International Relations Igor Lucena explains that, although the measure taken by the White House originates in a fiscal law, its effects can go beyond the economic sphere.
“The US commerce representative begins the internal consultation, which usually lasts from 45 to 60 days, and can make an internal discussion and increase rates,” he details.
“But if the US government understands that there are deals with trade agreements or political acts of a foreign government against US benefits or pre-established agreements, in addition to tariff increases, you can obviously have additional sanctions. For example: groups that have commercial benefits in the United States may even be cut off, and there may even be imports of imports and the total withdrawal of market goods. the capacity of much greater commercial retaliation [contra o Brasil]”, Complete Lucena.
The economist adds that section 301 has a commercial goal, but is also used as a pressure instrument since the law was signed in 1974. “Imagine orange juice and coffee prohibited from being exported to the United States. It would be a very large climb.”
Judiciary in the target?
And could these retaliations occur against political or Brazilian judiciary? Lucena explains that as a mechanism directed to foreign states, section 301 has no jurisdiction for it. However, he recalls, the same process can be added laws that punish individuals, such as the magnitsky law.
“The government can understand that foreign states perform unfair actions against the US and, together with the sanction provided for in section 301 – which is a commercial sanction – can apply other types of measures, such as magnitsky law or other forms of economic pressure that sanction individuals. This is because, in practice, section 301 focuses on punishments and sanctions against foreign states. By individuals or authorities. Thus, the government could combine the measures of section 301 with other actions within the same process, “he details.
Lucena adds that economic tensions between Brazil and the United States could have parked at a lower level if the White House had an ambassador in Brazilian territory.
“The presence of an ambassador shows that the country is seen as a reference, that Brazil is important in the international scenario. From the moment there is no this figure, it is the contempt of the Trump administration by the current management of Brazil. This is for several reasons and comes from the beginning, when, throughout the election campaign, President Donald Trump was openly criticized by President Lula, who even asked Kamala Harris, which opened a very negative flank. I think this was very marked – so much so that President Lula didn’t even meet Donald Trump, and I think this is the first time we watched it. “
In addition to criticism in the election period, Lucena points out that the recent positions of the government, which in BRICS have positioned themselves in favor of commercial desolarization, may have impacted.
“The actions of the Brazilian government are actions that are hostile by the administration Trump, so he does not even establish an ambassador, thus showing his contempt for the Brazilian administration.”
