USTR Announces Major Section 301 Developments Involving Brazil, Vietnam and Forced Labor Enforcement

Over the past week, the Office of the U.S. Trade Representative (USTR) released three significant updates related to investigations under Section 301 of the Trade Act of 1974. These actions reflect USTR’s increasingly expansive use of Section 301 to address a wide range of trade, regulatory, and labor-related concerns. The announcements include:

• The results of an investigation into Brazil, along with a proposal to impose a 25% tariff on a broad range of Brazilian products;
• The launch of an investigation into Vietnam’s intellectual property protection and enforcement policies, which could lead to the imposition of new tariffs or other trade measures; and 
• The release of findings from a broad investigation into 60 economies regarding failures to prohibit or enforce bans on the importation of goods produced with forced labor.

Together, these developments signal a continued willingness by USTR to apply Section 301 in areas that extend beyond traditional trade disputes, including digital trade and electronic payment services, anti-corruption enforcement, intellectual property protection, environmental enforcement, ethanol market access, and labor practices. 

Brazil Section 301 Proposal: 25% Tariff with Extensive Exemptions

On June 1, 2026, USTR published a notice of determination finding that several Brazilian policies and practices are actionable under Sections 301(b) and 304(a). USTR is proposing an additional 25% ad valorem duty on all goods of Brazilian origin but with a substantial list of exemptions. Although framed broadly, the proposed action appears to apply to fewer product categories than prior IEEPA-related Brazil tariff measures, according to market reporting and commentary. 

The proposed exemption list is extensive and reportedly spans more than 1,600 Harmonized Tariff Schedule of the U.S. (HTSUS) classifications across numerous product categories. The proposed exclusions generally fall into the following categories: 

• Goods that are routinely exempted from similar trade actions; 
• Products already subject to other U.S. trade measures, such as the Section 232 tariffs; 
• Key raw materials and other inputs where additional duties could disrupt U.S. supply chains or cause wider economic harm; 
• Products not readily available from U.S. or alternative suppliers; and 
• Items for which additional tariffs would not meaningfully advance USTR’s policy goals. 

Reports indicate that several major Brazilian exports to the U.S. — such as certain petroleum-related products, coffee, orange juice, beef, nuts, chemical wood pulp, and many aircraft-related goods — may remain outside the scope of the proposed tariffs.

Basis for USTR’s Findings

USTR found Brazil’s policies to be unreasonable or discriminatory across all six areas examined in the investigation launched in July 2025. Key findings include:

• Digital trade and electronic payment services: USTR cited Brazilian court orders requiring U.S. social media companies to remove content and suspend user profiles, combined with secrecy obligations and penalties. USTR also concluded that Brazil’s treatment of its “Pix” payment system unfairly disadvantages U.S. electronic payment service providers;
• Preferential tariffs: USTR objected to Brazil’s tariff preferences for certain imports from Mexico and India, particularly in sectors where the U.S. is also globally competitive, and concluded that these preferences unfairly disadvantage U.S. exports and may encourage offshoring;
• Anti-corruption enforcement: USTR determined that Brazil’s enforcement efforts are insufficient, referencing concerns raised by the OECD and Transparency International, and determined that these shortcomings disadvantage U.S. businesses operating under stricter compliance expectations;
• Intellectual property protection: USTR highlighted longstanding issues such as weak anti-counterfeiting enforcement, slow patent examination timelines, and inadequate anti-piracy measures;
• Ethanol tariffs: USTR criticized Brazil’s ethanol tariff regime, noting a departure from prior bilateral reciprocity and the resulting decline in U.S. ethanol exports; and 
• Environmental enforcement: USTR concluded that Brazil has not adequately enforced laws addressing illegal deforestation, giving certain Brazilian agricultural and wood products an unfair competitive advantage.

Comment Process and Timing

The Brazil proposal is not yet final. Key dates include: 

• June 22,2026: Deadline to request to appear at the public hearing and submit testimony summaries;
• July 1, 2026: Deadline for written comments; 
• July 6, 2026: Public hearing; and
• July 15, 2026: Statutory deadline to take responsive action. 

The proposal comes amid reports of intensified U.S.-Brazil engagement but also rising political tension. Brazilian officials have publicly suggested that Brazil may consider retaliatory measures if tariffs are imposed. At the same time, the breadth of the proposed exemptions suggests USTR may be attempting to balance policy objectives with concerns about inflation and supply-chain stability. For importers, the practical impact of the proposal will depend less on the headline 25% tariff rate and more on whether particular products fall within the proposed exclusions, including overlap with existing Section 232 measures.

Section 301 Investigation into Vietnam

USTR initiated a Section 301 investigation into Vietnam’s intellectual property protection and enforcement practices on May 29, 2026. Vietnam was designated a Priority Foreign Country (PFC) by the USTR in an April 30, 2026, Special 301 Report — the first such designation since 2013. This category is reserved for trading partners with the most serious intellectual property-related practices.

The investigation will focus on:

• Widespread online piracy and lax criminal enforcement;
• Extensive counterfeiting in physical and online markets and weak criminal enforcement;
• Inconsistent and ineffective border enforcement;
• Lack of enforcement against the use of unlicensed software; and
• Cable and satellite signal theft and lack of enforcement.

Vietnam has disputed USTR’s allegations and has urged USTR to consider recent legislative reforms, including a new intellectual property law enacted in December 2025. 

A final determination on the investigation is due by November 29, 2026, after which USTR may recommend responsive action, such as tariffs and/or other trade measures.

It should be noted that Vietnam is one of the economies cited in the forced labor Section 301 investigation (see below). 

Forced Labor-Related Section 301 Tariffs

On June 2, 2026, USTR released determinations from separate investigations examining whether 60 economies have imposed and effectively enforced prohibitions on the importation of goods produced with forced labor. USTR concluded that all 60 economies acted unreasonably and in ways that burden or restrict U.S. commerce. Specifically, USTR determined that 54 economies have failed to impose and effectively enforce a forced labor import prohibition, while six economies — Canada, Ecuador, the EU, Indonesia, Mexico, and Pakistan — have failed to effectively enforce an existing prohibition. Based on those findings, USTR proposes additional ad valorem duties on goods of the investigated economies, subject to Annex A exclusions.

USTR proposes:

• 10% additional duties for economies that either maintain a forced labor import prohibition, have made related commitments in reciprocal trade agreements, or maintain a partial regime with similar effect. This group includes Canada, Ecuador, the EU, Indonesia, Mexico, Pakistan, the UK, and certain economies that have made commitments to the U.S. in this area, including Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Malaysia, and Taiwan; and
• 12.5% additional duties for all other investigated economies.

As with the Brazil proposal, USTR has outlined broad exclusions. These appear to cover:

• Standard exempted goods; 
• Products already subject to other trade measures, including articles and parts covered by Section 232 tariffs; 
• Raw materials and other goods where additional duties could create supply shortages or broader economic disruption; 
• Products not available in sufficient quantities from U.S. or alternative suppliers; and 
• Items for which additional tariffs may not materially advance USTR’s policy objectives. 

Public reporting suggests that exclusions include certain tropical fruits and vegetables, spices, medicines, chemicals, minerals and ores, aerospace goods, semiconductor-related items, and some products covered by regional trade preference programs. 

USTR is also seeking comments on a proposed textile mechanism that would allow specified volumes of apparel and textile imports from certain economies to enter at a reduced Section 301 tariff rate, apparently tied to the volume of U.S. textile or cotton exports purchased by the partner country.

Practical Considerations for Importers

Although the Brazil and forced labor proposals are not yet final and the Vietnam investigation has just begun, importers should begin assessing potential exposure. 

For companies importing from Brazil, the immediate question is whether their products fall within the proposed tariff scope or within the Annex exclusions. For companies sourcing from multiple countries, the forced labor-related proposal may require a more extensive country-by-country and product-by-product review. In either case, businesses should consider reviewing tariff classifications, supply chains, and existing duty programs; assessing whether exclusions may apply; modeling potential duty costs; and determining whether to participate in the USTR comment process, especially where companies can demonstrate product-specific supply chain constraints or commercial harm.