USTR launches trade investigation against Brazil

U.S. Trade Representative Jaimeson Greer announced on July 15 that, at President Donald Trump’s direction, he was launching “a Section 301 investigation into Brazil’s attacks on American social media companies, as well as other unfair trading practices that harm American companies, workers, farmers and technology innovators.”

Section 301 of the U.S. Trade Act of 1974 authorizes the USTR to initiate an investigation to determine whether acts, policies and practices of a foreign country are unreasonable or discriminatory and burden or restrict U.S. commerce.

If that determination is affirmative with respect to Brazil, the USTR must determine whether action is appropriate and, if so, what action should be taken, including tariff and non-tariff actions.

Then on July 30, President Trump declared a new national emergency under the president’s International Emergency Economic Powers Act of 1977, known as IEEPA, to address threats to the United States from the government of Brazil.

The president ordered an additional 40% tariff on Brazil, bringing the total tariff amount applied to Brazilian imports to 50%, which includes beef and many other goods.

R-CALF USA is participating in the Section 301 investigation and filed written comments with the USTR.

In our comment’s preamble, we point out that the United States is the world’s largest beef-consuming nation and for decades its cattle industry has been incapable of maintaining a national herd size needed to produce enough beef to satisfy domestic demand.

We stated that for decades the United States has been growing its dependency on imports to make up for the industry’s underproduction.

We then explain how this reliance on imports to satisfy domestic demand has resulted in a contraction of the U.S. cattle industry; that imported cattle and beef are now a direct substitute for domestic cattle and beef; and, because those imported substitutes cost less and are undifferentiated, there are little to no incentives for the U.S. cattle industry to grow or even to continually attract new entrants.

Instead, we explain that any and all economic opportunities that might lead to expanding the U.S. cattle industry or that might attract a younger generation are stymied by the availability of growing volumes of cheaper, undifferentiated imports.

In the body of our comments, we addressed how Brazil’s disregard for our tariff rate quota is accelerating the ongoing contraction of our U.S. cattle industry.

And we addressed how Brazil’s history of corruption regarding food safety and its failure to timely report incidences of dangerous disease outbreaks, particularly outbreaks of bovine spongiform encephalopathy, threatens the integrity of our domestic beef supply.

Regarding Brazil’s disregard for our tariff rate quota, we explain that Brazil is subject to a tariff rate quota of 65,005 metric tons of beef, which is intended to limit the volume of beef imports so that they do not undercut our domestic cattle and beef supply chains.

The United States had also established a tariff rate of 26.4% for imports exceeding the quota, which was intended to be a deterrent to excessive imports.

But Brazilian beef imports have exploded, and Brazil has been blowing by the tariff rate quota since 2019.

This year, Brazil’s quota was met during the first 17 days in January, and through June, the volume of Brazilian beef imports is five times greater than the limit.

We stated that Brazilian beef imports are accelerating the ongoing contraction of the U.S. cattle industry by displacing domestic cattle producers, their cattle and domestic feedlots — and this is weakening America’s ability to be self-reliant in beef production.

Regarding Brazil’s history of corruption, we referenced the multiyear criminal investigations uncovered in 2017 and 2018 that found at least 40 cases of Brazilian food safety regulators who had accepted bribes to allow food processors to distribute adulterated food products and several Brazilian laboratories that had falsified salmonella testing results.

We then explained that Brazil was obligated to report suspected cases of bovine spongiform encephalopathy, commonly known as mad cow disease, within 24 hours, but when it suspected a case in 2010, it did not report it until nearly two years later in 2012.

Brazil’s failure to timely report BSE cases is chronic. Since 2012, Brazil has reported five additional cases of BSE, though none were timely reported.

We asked USTR to suspend Brazilian beef imports until a full investigation of Brazil’s production and processing practices is complete, and we recommended that any resumption of imports be subject to a finite tariff rate quota that would allow the U.S. cattle industry to rebuild and expand and that would encourage new entrants.

We also reiterated our call to reinstate mandatory country-of-origin labeling on all beef sold at retail so consumers can choose whether to purchase imported beef or support American producers.