The US Trade Representative (USTR) launched an investigation into illegal deforestation in Brazil to determine if it undermines the competitiveness of US timber and agricultural industries.
The investigation will "seek to determine whether [the Brazilian government's] acts, policies and practices" related to illegal deforestation "are unreasonable or discriminatory and burden or restrict US commerce," namely US timber and agricultural producers.
Brazil is a major producer of timber and agricultural goods, but much of that growth has been through widespread environmental destruction, including in the Amazon rainforest, and coversion of that land to grow crops.
Brazil has taken measures to combat the deforestation, however, leading to a 32pc decline in deforestation in 2024 from a year prior, according to its space institute Inpe. It also reduced wildfires in the first half of 2025 by 66pc from the same period a year before, according to its environment ministry. The country has set a goal of eliminating deforestation by 2030.
Brazil's federal government has also worked to strengthen funds to combat deforestation and climate change, such as the Amazon fund and the Climate fund. The latter was set up in 2008 but suspended in 2019 during the presidency of Jair Bolsonaro, a climate skeptic. The current administration has since reinstated it.
Brazil's current federal administration has also put environmental issues at the forefront of its policies, seeking to become a leader in that area. This includes highlighting the issues during its hosting of the G20 summit last year, the Brics summit earlier this month, and hosting the UN Cop 30 climate summit in November.
But some government initiatives — such as the push to drill the environmentally-sensitive equatorial margin — have drawn backlash from climate groups. An environmental licensing bill currently held up in the lower house is also receiving criticism from environmentalists and the environment ministry because it exempts some sectors, such as forms of agriculture that opening large areas for crops or cattle, from needing to obtain environmental licenses. Climate agency Observatorio do Clima called it "the largest legal setback since the creation of Brazil's constitution."
Deforestation will be one of the country's flagship issues during the Cop 30 summit, including promoting the Tropical Forest Forever Facility (TFFF) initiative, a fund to preserve global tropical forests.
USTR's investigation comes a week after US president Donald Trump threatened to impose a 50pc tariff on imports from Brazil as of 1 August, citing both unfair practices by Brazil and the ongoing trial of Bolsonaro, which he called "a witch hunt".
The investigation will also probe the access of Brazilian ethanol into the US market, digital trade and electronic payment services, anti-corruption interference and intellectual property protection.
