In the latest twist in its showdown over U.S. cotton subsidies, Brazil said on March 8 it would raise tariffs on $591 million worth of U.S. products.
The list of about a hundred products included many luxury consumer items, such as cosmetics (shampoos, cologne, beauty creams), appliances (televisions, sound and kitchen equipment) and cars, for which Brazil intends to raise levies.
A further maximum of $238 million in penalties may also be applied in the intellectual property and services sectors.
In a landmark decision, the World Trade Organization (WTO) allowed Brazil to impose up to $829.3 million in retaliatory sanctions against the United States over unfair U.S. cotton subsidies.
U.S. Commerce Secretary Gary Locke will travel to Brasilia on March 9 as the two countries remain engaged in negotiations to settle the dispute. On March 3, Brazil gave the United States a 30-day deadline to reach a bilateral agreement to avoid higher levies.
"There is time for us to resolve this in a peaceful and productive way without any further action," U.S. Secretary of State Hillary Clinton said during a visit to Brazil last week.
Carlos Marcio Cozendey, head of the economics division at the Brazilian foreign affairs ministry, said "we want a comprehensive solution to this issue; so far we have not received a concrete response."
The WTO in June 2008 ruled that subsidies to U.S. cotton producers were discriminatory. Under WTO rules, sanctions can be imposed until the offending party brings its trade regime into line with international rules.
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