With no agreement expected, deadline for US tariffs expires this Wednesday

Both Brazil's refusal to negotiate changes to Pix and the opposition of the United States (USA) to accepting the reduction of the surcharge that the country imposes on Brazilian sugar in exchange for changes in the tariff on ethanol entering Brazil contribute to making the agreement difficult.

For experts consulted by Agência Brasil, the tariff is politically motivated, and not strictly economic. In this context, it would serve as a pressure mechanism to fit Brazil into the Donald Trump government's new doctrine for Latin America. Dubbed the Trump corollary to the Monroe Doctrine, the new US security policy seeks to reaffirm Washington's prominence on the continent in the face of China's economic rise.

International law professor Paulo Borba Casella, from the University of São Paulo (USP), told Agência Brasil that the US “does not disguise” that the measure is politically motivated, making it difficult to reach an agreement.

Casella recalled that Trump called Brazil a “nasty” country and that the proposed tariff is a way of “interfering in internal politics”.

"Any negotiation and possible agreement depend on reciprocal interest and goodwill. To the extent that this is not found on their part, it would be difficult to reach any understanding", he concluded.

Using Section 301 of US legislation, the USTR alleges “unfair practices” by Brazil in relation to Pix, ethanol, illegal deforestation, among other points.

Realignment of Latin America

International relations professor at Ibmec-SP Alexandre Pires highlighted that the Trump administration has “hardened” its stance towards countries that are not aligned with Washington's policies, which would include Brazil.

"The White House seeks to realign the Western Hemisphere with the US and move it away from Chinese economic and technological influence. Brazil in the last 20 years has strengthened its ties with China, in the face of an increasing closure of traditional partners, Europe and North America", he said.

For Alexandre Pires, although Brazil also practices trade protectionism in some areas, the international context is more politicized and tense, placing Brazilian practices “under scrutiny”.

“The US desire is to eliminate Brazilian trade barriers in relation to American companies, but this is not feasible in the very short term”, added the professor.

In response to US accusations of “unfair” trade practices by Brazil, Foreign Affairs Minister Mauro Vieira rebutted each of the USTR's allegations.

“This [the tariff] would burden a bilateral trade and investment relationship that is clearly important for both sides, at the same time that it would reduce the space for dialogue that is more capable of producing practical results,” said Vieira.

Ethanol and sugar

One of the US demands is that Brazil eliminate import tariffs on ethanol produced in the North American country, which could harm Brazilian producers.

The government has been asking to keep ethanol out of negotiations, despite suggesting that the US remove, in exchange, tariffs on sugar produced in Brazil.

"The government has been advocating that ethanol not be addressed in this discussion. It is a shame that other people think differently so that American ethanol can enter the Brazilian market easily", stated the Minister of Development, Industry, Commerce and Services, Márcio Elias Rosa.

Rosa highlighted that the sector is strategic, especially for the Northeast, and recalled that Brazilian sugar faces strong barriers to entering the American market.

"Our sugar has a surcharge in the United States of almost 100%. It is not possible to separate the two chains," he told journalists a few days ago. The government's position is defended by Brazilian sugarcane producers' associations.

The Sugarcane and Bioenergy Industry Union, the National Corn Ethanol Union and the Brazilian Agriculture and Livestock Confederation (CNA) argue that the drop in American ethanol imports is not just a result of tariffs, but mainly the expansion of national production.

For USP professor Paulo Borba Casella, the debate surrounding ethanol in negotiations with the USA reinforces the thesis that the objective is to create political problems for Brazil.

"They are right not to negotiate the ethanol issue, unless they remove the surcharge on Brazilian sugar. After all, it is an equivalent situation, based on the same product", commented the professor, who is also president of the São Paulo Institute of International Law and International Relations (IDIRI).

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