Reagan Imposes $105 Million in Tariffs on Brazilian Products : Orders Embargo on Imports of Computer Items

President Reagan today imposed $105 million worth of tariffs on Brazilian exports to the United States and put an embargo on imports of computer products.

Reagan’s long-awaited action came after four years of unsuccessful talks with Brazil, which has restricted foreign participation in the computer market. When consultations broke down after two years in 1985, the United States began steps to impose sanctions, then suspended them a year later after Brazil said it would be more flexible.

Not Keeping Commitments

“Recent developments in Brazil make it clear that these commitments are not being kept,” Reagan said in a written statement.

“In particular, the Brazilian government has rejected efforts by an American software company to license its product in Brazil. . . . This decision establishes a precedent which effectively bans U.S. companies from the Brazilian software market. It is also likely to increase piracy of foreign software, since demand for the prohibited product will continue.”

A notice of the order will be placed in the Federal Register next week listing certain products that would have new tariffs added. Public hearings will be held and the products will be selected later. The size of the sanctions will amount to $105 million, the estimated annual loss to American computer companies caused by the Brazilian restrictions.

Computer Products

Although the United States does not import Brazilian computer products, they are banned so long as Brazil protects computer software.

“Brazil is a good friend of the United States and we support the steps it is taking to restore its democratic institutions,” Reagan said. “But Brazil is also a major beneficiary of the global trading system, the openness of which cannot be maintained if markets are deliberately closed, and policies incompatible with a more free and open trading system are established.”

Targeted for Retaliation

The Administration targeted Brazil for possible retaliation in September, 1985, contending that its curbs on imports of computers and information technology had cost U.S. manufacturers $1.5 billion in potential sales from 1980 to 1984.

The Administration claims further damage as a result of pirated software. In response to that complaint, and under the threat of sanctions, Brazilian lawmakers have been moving toward passage of legislation that would grant copyright protection to American software.

Movement on that issue prompted Reagan to suspend part of the trade case against Brazil. But aides said at the time that the Administration would continue to monitor accessibility to the Brazilian market. In recent weeks, evidence mounted that the restrictions have not been eased, and may have been expanded, officials said.