After consultations with Washington ended without a deal, the Lula regime has decided to ask the World Trade Organization for a dispute panel against U.S. tariffs of up to 37.5% on Brazilian goods, SBT News reports. A new FGV study shows American buyers still anchor Brazil's factory exports.
BRASILIA — The Lula regime has decided to turn its tariff quarrel with the Trump administration into formal litigation, asking the World Trade Organization for a dispute panel on the duties Washington imposes on Brazilian goods, SBT News reported on Friday, citing three members of the federal government. Consultations ended without a deal, and one official said the request is on the agenda of the WTO’s Dispute Settlement Body for Nov. 24.
The case, DS646, began on July 27, when Brazil requested consultations over two duties adopted under Section 301 of the U.S. Trade Act: 25% after a U.S. Trade Representative probe of Brazilian trade practices, and 12.5% after a separate probe into forced labor. On goods hit by both, the surcharge reaches 37.5%. According to SBT News, the American probe cited illegal deforestation, Brazil’s PIX payment system and São Paulo’s 25 de Março street, a market known for counterfeit goods. Washington accepted the consultations, China asked to join, and a meeting in Geneva in September produced nothing. It is not Brasília’s first complaint: it also requested consultations in August 2025 against the earlier 50% tariffs.
Why it matters
The United States is still a market Brazil cannot replace for its factories. A study released on Friday by Fundação Getulio Vargas (FGV), Brazil’s leading economic research institute, found that the American share of exports fell in 25 of 29 sectors between 2025 and 2026, led by fishing, timber, furniture, oil and rubber, the newspaper O Estado de S. Paulo reported. But the tariffs have not changed what Brazil sells to the U.S., and 12 sectors still send 20% or more of their exports there, including computers, electrical and industrial machinery. China, the regime’s preferred partner, takes less than 2% of Brazil’s computer and machinery exports. FGV concludes that replacing the American buyer for higher-value goods “remains a challenge.” The panel puts that trade under a year of legal doubt, while foreign capital is already leaving Brazil.
A lawsuit with no court of appeal
Under WTO rules, the United States can block the first request on Nov. 24. At the next meeting, set for Dec. 17, it can no longer block it alone, and the panel is expected to be established. Choosing three trade experts takes 60 to 90 days, and the work runs about a year. The losing side can appeal to the WTO’s Appellate Body, which has been out of operation because Washington has blocked the appointment of its members. One official told SBT News that the panel will give Brazil “bargaining power in the negotiation,” meaning the talks between Trade Minister Márcio Elias Rosa and U.S. Trade Representative Jamieson Greer, reopened after a Lula-Trump phone call.
The record
Confirmed in the WTO record: Brazil’s July 27 request, the two duties, Washington’s acceptance and China’s request to join. Confirmed by FGV: the sector figures. Reported but not yet official: the decision to request a panel and the Nov. 24 date, both from government sources speaking to SBT News. The WTO’s case page still listed DS646 as being in consultations at the time of writing.
The regime is answering a list of specific American complaints, from PIX to deforestation enforcement to counterfeit markets, with a filing in Geneva instead of changes at home. It is suing in a system whose final stage Washington has already switched off, and its own officials call the case a bargaining chip in talks they say they want to protect, while the regime keeps courting Washington’s adversaries. Brazilian makers of machines and electronics that still depend on American buyers get a year of litigation and, at best, a ruling no one can enforce. That is a diplomatic posture, not a trade policy.
The Watch Post Daily will continue to follow this story. Sources: SBT News (Renato Machado column, Nov. 13, 2026), FGV Foreign Trade Indicator (Icomex) as reported by O Estado de S. Paulo via UOL (Nov. 13, 2026), WTO dispute DS646 records.
Featured image: At Geneva 2024 135 (Centre William Rappard, WTO headquarters) by Mike Peel, via Wikimedia Commons, CC BY-SA 4.0.
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