South America Calling
Kieran Gartlan DTN South America Correspondent

Monday 03/08/10

Brazil Retaliates Against U.S. Cotton Subsidies

Brazil has retaliated against U.S. cotton subsidies by increasing tariffs on 102 items imported from the U.S.

Brazil won its case against U.S. cotton subsidies at the World Trade Organization last year, and is now entitled to retaliate with measures that will cost U.S. exporters up to $830 million a year.

Items on the retaliation list mostly include luxury goods such as cosmetics and leisure boats, as well as clothes, textiles and automobiles.

Among agricultural products to suffer tariff increases will be wheat, powdered milk and fruit. For most items tariff rates will be doubled, and in the case of clothes and textiles they will be as high as 100 percent.

The McDonalds fast food chain will also be affected as import tariff on sauces and condiments will be increased.

Imposing higher import tariffs was the solution presented to Brazil by the WTO after the U.S. refused to change its cotton subsidy program. However, negotiations are taking place to come up with an alternative solution, which could include a reduction in U.S. tariffs on Brazilian meat, orange juice and ethanol.

The tariff increases will take effect in 30 days.

Posted at 8:57AM CST 03/08/10 by Kieran Gartlan
Comments (3)
If Brazil implements this action then the USA should not only maintain the current tariff on sugar based ethonal imported from Brazil, which Brazil is demanding we remove, but should double it. Additionally we should impose higher tariffs on anythind else imported from Brazil. We seem to have a such a large supply of corn that it is not even worth the cost of production, maybe we should grow our own sugar for ethonal and forget Brazil.
Posted by Unknown at 4:41PM CST 03/08/10
I have nver understood why Brazil is doing this. Ever time the US lower cotton acres Brazil increased acreage. This entire episode has been a travesty of justice. Ever since Step 2 was eliminated the american cotton farmer has lost market share.
Posted by GEORGE PALMER at 5:54PM CST 03/08/10
we are just the big bad U.S.A that treats every other country badly and hurts their market share Bull S--t
Posted by GEORGE ANDERSON at 5:58AM CDT 03/15/10
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