The US agrees to consultations with Brazil at the WTO regarding additional tariffs.

The United States has accepted Brazil's request for formal consultations at the World Trade Organization (WTO) regarding the additional tariffs applied to products originating from Brazil. The decision allows both countries to begin the first stage of the WTO's dispute settlement system, although it does not imply recognition of Brazil's claims.

Brazil submitted its request on July 27, 2026, initiating the WTO's institutional procedure, in which consultations constitute the first stage of a dispute. Its purpose is to allow the affected party to formally challenge measures adopted by another member and seek a negotiated solution before an investigation is opened. The discussions are conducted based on agreements and commitments made within the Organization.

The acceptance by the United States, therefore, opens the way for Brazil and the United States to confront the measures applied with the legal obligations invoked by the Brazilian government. This does not mean, however, that Washington has accepted the merits of the complaint or demonstrated a willingness to remove the tariffs.

Remember the case

The Brazilian petition challenges two measures adopted by the United States based on Section 301 of the Trade Act of 1974.

The first stems from an investigation specifically targeting Brazil, which assessed policies related to digital commerce and electronic payment systems, preferential tariffs, the fight against corruption, intellectual property, access to the Brazilian ethanol market, and illegal deforestation. As a result, the United States applied an additional 25% tariff to several Brazilian products, with exceptions made for those of great interest to Brazilian importers. The measure took effect on July 22. (read more here)

The second investigation involved Brazil and 59 other countries. In this case, the U.S. government assessed whether the investigated countries had restrictions on the import of goods produced with forced labor. For Brazil, the investigation resulted in an additional tariff of 12,5%, also subject to exceptions, in effect since July 24.

According to the formal request for consultations, Brazil considers the measures incompatible with Articles I and II of the 1994 General Agreement on Tariffs and Trade (GATT), as well as Articles 23.1 and 23.2 of the WTO Dispute Settlement Agreement.

Article I establishes the most-favored-nation principle. In practical terms, tariff advantages granted by a WTO member to products from a particular country must be extended, immediately and unconditionally, to similar products from other members. Brazil argues that the additional tariffs impose less favorable treatment on Brazilian products than that granted to similar products from other origins.

Articles II and III protect the tariff commitments consolidated by each member in the WTO. The Brazilian complaint argues that the additional tariffs exceed the maximum rates recorded by the United States and, as a consequence, offer Brazil less favorable treatment than that foreseen in these commitments.

Articles 23.1 and 23.2 of the Agreement on Dispute Settlement seek to limit unilateral trade actions. Brazil argues that the United States unilaterally determined the existence of practices detrimental to its interests and applied tariff measures before resorting to the WTO's multilateral procedures.

Next Steps

The consultation period is set for 60 days. During this time, governments can negotiate a mutually acceptable solution. If no agreement is reached, Brazil may request the WTO Dispute Settlement Body to establish a panel to examine Brazil's measures and concerns.

Panels of this type are composed of independent experts to validate or reject the claims of the affected party. If a violation is identified, the panel must recommend that the measure be brought into compliance with WTO obligations.

Regardless of the outcome, the panel's report can be challenged by either party at the WTO's highest court, the Appellate Body. This body has the prerogative, if it finds that violations have been made, to authorize trade retaliations in favor of the affected party.

The Appellate Body has been inoperative since December 2019, due to a deliberate action by the US in rejecting expert nominations for its composition. Since then, the WTO's formal dispute settlement system has been paralyzed.

The opening of the case maintains institutional and diplomatic importance. It formalizes Brazil's allegations, creates a negotiation agenda, and reinforces the questioning of the unilateral use of Section 301. At the same time, the paralysis of the Appellate Body limits the ability to transform any eventual decision favorable to Brazil into an enforceable obligation.

Effects on Brazilian agribusiness

Several agricultural and livestock products are exempt from US tariffs, including coffee, beef, orange juice, some fruits, fish, and cellulose. In many of these markets, Brazil holds a significant position as a supplier, and a high tariff could generate significant inflationary impacts on the US economy.

Nevertheless, the tariff shock to Brazilian exports is significant. In 2025, before the introduction of the new measures, the import tariff on Brazilian agribusiness exports to the United States corresponded to a weighted average of 3,7%. Considering the same composition and the imported values ​​in that year, the new tariffs would raise this average to 16,74%.

In the short term, opening the consultations does not alter the costs faced by the affected sectors. Its main effect is to create an institutional channel for negotiation and legal challenge. For Brazilian agribusiness, the outcome will depend less on the formal start of the process and more on the ability to obtain changes to the exception lists, reduce tariffs through negotiation, or prevent a potential panel decision from being blocked by the current paralysis of the appeals system.