Key Points

  • In a July 9 letter sent to his Brazilian counterpart, President Trump vowed to impose a 50% tariff on “any and all Brazilian products” imported into the United States, effective August 1. He also previewed the initiation on July 15 of a U.S. investigation under Section 301 of the Trade Act of 1974 into Brazil’s alleged unfair trade practices.
  • Brazilian President Luiz Inácio Lula da Silva responded by indicating Brazil would negotiate with the United States to try to avert the tariff, but would also be ready to impose countermeasures in accordance with Brazil’s recently-approved Economic Reciprocity Act.
  • The situation and the resulting uncertainty will have important implications for companies doing business across the U.S. and Brazilian markets. Businesses should consider the short and long-term risks resulting from heightened trade and investment tensions between both countries.
  • Sectors and companies potentially affected may benefit from outreach to government officials in both countries. The Brazilian Economic Reciprocity Act in particular includes provisions for private sector input in case Brazil decides to retaliate. The Section 301 investigation launched by the United States into Brazil’s trade practices—which itself may result in additional U.S. tariffs or other retaliatory trade measures—will also provide interested sectors and businesses the opportunity to submit comments or testimony to the U.S. government.

Click here to read the full alert on cov.com.

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Photo of Kate McNulty Kate McNulty

Kate McNulty is a senior associate in the Washington office who helps clients navigate complex international trade and investment matters. She counsels companies, trade associations, and governments on U.S. trade and tariff measures, as well as implementation of responsive measures by foreign governments.

Kate McNulty is a senior associate in the Washington office who helps clients navigate complex international trade and investment matters. She counsels companies, trade associations, and governments on U.S. trade and tariff measures, as well as implementation of responsive measures by foreign governments. She provides legal and strategic advice to clients on global policy issues and geopolitical risks, including assessing and mitigating reputational, economic, or physical risk to their businesses or investments. She advises clients on the application and use of international treaties—including free trade agreements (FTAs), bilateral investment treaties (BITs), and agreements under World Trade Organization (WTO) framework—to open markets and resolve disputes, also advising clients seeking to understand and engage with the negotiation and implementation of such agreements.

Kate also focuses her trade practice on U.S. anti-forced labor laws as well as business-related human rights matters, advising clients on the application and enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) and Withhold Release Orders (WROs) issued by the U.S. government. She helps clients develop and implement strategies to mitigate supply chain risks, including by building compliance programs, developing due diligence procedures, and conducting risk assessments. She also advises clients on conducting human rights-related investigations and implementing related findings.

Kate has represented corporate clients in both commercial and investment treaty arbitrations, including under ICSID, ICC, UNCITRAL, and ICDR rules, and also represents clients in proceedings before U.S. administrative bodies and U.S. courts, including in trade remedy proceedings (AD/CVD).

She also maintains an active pro bono practice focused on international human rights and public international law. She has represented U.S.-funded media outlet Radio Free Europe/Radio Liberty to secure the release of one of its journalists in a prisoner exchange with Russia. Her work also includes representation of the Clooney Foundation for Justice, the American Bar Association Center for Human Rights, and the Public International Law & Policy Group.

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Photo of Daniel Erikson Daniel Erikson

Daniel P. Erikson has more than twenty years of experience in international relations, foreign policy, national security, and defense policy, primarily focused on Western Hemisphere affairs. A non-lawyer, Dan’s experience includes serving at the National Security Council, the Department of Defense, the Office…

Daniel P. Erikson has more than twenty years of experience in international relations, foreign policy, national security, and defense policy, primarily focused on Western Hemisphere affairs. A non-lawyer, Dan’s experience includes serving at the National Security Council, the Department of Defense, the Office of the Vice President, and the Department of State, as well as work for think-tanks, universities, and private sector consultancies.

Prior to joining the firm, Dan was Special Assistant to the President and Senior Director for Western Hemisphere Affairs at the National Security Council, where he served as the lead White House advisor on the hemisphere. His work covered all diplomatic, economic, and national security issues related to Mexico, Central America, the Caribbean, South America, and Canada.

Dan was previously the Deputy Assistant Secretary of Defense for the Western Hemisphere at the U.S. Department of Defense. At the Pentagon, he successfully advanced U.S. defense priorities as the Department’s senior policy official for the Western Hemisphere, with a focus on defense modernization, effective security cooperation, counter-narcotics, climate resilience, cyber, and humanitarian assistance and disaster relief. In this capacity, Dan served as a member of the Senior Executive Service and managed a team of civilian and military defense professionals to provide policy guidance to the Secretary of Defense, U.S. Northern Command, and U.S. Southern Command.

Dan also served in the White House as Special Advisor to the Vice President, where he covered foreign affairs, economic, and national security issues in the Western Hemisphere. Prior to this, Dan was Senior Advisor for Congressional and Inter-Governmental Affairs and Senior Advisor for Policy at the U.S. Department of State. His responsibilities included advising State Department leadership on complex diplomatic issues and key administration and congressional priorities.

In addition to his U.S. government experience, Dan has held senior positions in the private sector, think-tanks, and academia. He has published widely on a range of topics in international and Latin American and Caribbean affairs and testified before the U.S. Congress. He is the recipient of the Secretary of Defense Medal for Outstanding Public Service and the U.S. State Department’s Superior Honor Award.

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Photo of Diego Bonomo Diego Bonomo

Diego Bonomo is a senior advisor in the firm’s London office. Diego, a non-lawyer, has more than 20 years of Brazil regulatory, trade, and foreign affairs experience at leading business associations, think tanks, companies, and academic institutions. Diego also served in the Brazilian…

Diego Bonomo is a senior advisor in the firm’s London office. Diego, a non-lawyer, has more than 20 years of Brazil regulatory, trade, and foreign affairs experience at leading business associations, think tanks, companies, and academic institutions. Diego also served in the Brazilian government.

Before joining the firm, Diego was Team Leader of the Brazil Trade Facilitation Program at Palladium and Executive Manager for International Affairs at Brazil’s National Confederation of Industry (Confederação Nacional da Indústria, CNI). At the U.S. Chamber of Commerce, he served as Senior Director of the International Division and Senior Director for Policy of the Brazil-U.S. Business Council. Diego also was Executive Director of the Brazil Industries Coalition (BIC), the leading Brazilian business coalition in the United States, and General Coordinator of Foreign and Trade Affairs at the Federation of Industries of the State of São Paulo (Federação das Indústrias do Estado de São Paulo, FIESP). He previously served in the Office of the President of Brazil as advisor to the Minister of Long-Term Planning.

Diego holds a bachelor’s and master’s degree in international relations from the Pontifical Catholic University of São Paulo.

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