The Trump administration is using Section 301 trade law to punish Brazil for building a payment system that works better than Visa and Mastercard.
Here are the numbers. More than 90 percent of Brazilian adults — 140 million people — use PIX. It handles more transactions than credit and debit cards combined. It costs individual users nothing. The World Bank and the International Monetary Fund have called it a model for financial inclusion. The number of active Brazilian financial system users nearly doubled from 2018 to 2023, from 77 million to 152 million, and the central bank says PIX drove most of that.
The U.S. response is a 25 percent tariff on 3,000 Brazilian goods covering $11 billion in annual exports, imposed under Section 301 of the Trade Act of 1974 — the same statute Washington has used against Chinese intellectual property practices, digital services taxes in Europe, and now domestic payment architecture in a Western Hemisphere ally. The Atlantic Council called it the first time Section 301 has explicitly targeted another country’s domestic payment system. It will not be the last, because the grievance is not really about PIX.
The official complaints filed against Brazil cite barriers to ethanol imports, anticorruption enforcement, and the concern that PIX “reduces reliance on the dollar.” But the operational complaint is what the administration says: that Brazil requires financial institutions with more than 500,000 active accounts to offer PIX, and that private providers cannot compete because they must cover fraud prevention, technology, and shareholder returns through fees. In other words, the U.S. government is using trade sanctions to protect the profit margins of Visa and Mastercard against a public payment system that eliminated their function.
The administration has spent months opening a formal investigation into PIX over competition claims, then proposing the very tariffs it has now imposed — a three-stage escalation that reveals deliberate targeting rather than spontaneous trade action. Section 301 gives the president sweeping authority to impose permanent duties over trade practices the U.S. deems “unreasonable or discriminatory,” and this administration has made clear it intends to use that authority to police foreign financial architecture. The precedent is the point: if Brazil can build a free national payment system that displaces U.S. credit card companies, other countries might try it, including the European Central Bank as it develops the digital euro.
The wonk-laundering operation here is transparent once you name the mechanism. “Unfair trade practice” is the language; protecting a private payment duopoly from a superior public competitor is the substance. Visa and Mastercard charge interchange fees that in many countries amount to a regressive tax on every transaction — a tax that PIX eliminated at the stroke of a central-bank regulation. The administration calls this a market distortion. What it calls a market is an arrangement in which U.S. payment companies collect rents on Brazilian transactions; what it calls a distortion is the public system that stopped those rents.
The Brazilian foreign minister called Rubio’s comments “a rude and arrogant attack” and vowed retaliatory measures — the latest escalation in a trade war that Washington started last year when it imposed 50 percent tariffs on Brazil demanding an end to the “persecution” of Jair Bolsonaro. Those duties were rolled back, and the Supreme Court later struck down many of Trump’s global tariffs, ruling he had exceeded his authority. Each time the administration’s tariff authority shrinks, it finds new grievances to justify the same pressure on Brazil.
The economics are simpler. Brazil built a payment system that works for 140 million people, that handles more transactions than the card networks, that reached into Amazonian villages where satellite internet and PIX replaced days of river travel for a bag of rice. The U.S. is taxing $11 billion of Brazilian goods because that system competes with Visa.
Lula has defended PIX as a matter of national pride. “PIX belongs to Brazil, and no one is going to make us change it,” he said earlier this year. Polls suggest the tariffs have boosted Lula ahead of October’s election against Bolsonaro’s son, Flávio — many Brazilians blame the Trump-allied Bolsonaro family for the tariffs, turning Washington’s trade aggression into a net political gift to the leader it is trying to pressure.
The real concern in Washington is the other grievance, the one about dollar dependence. PIX settles in reais. A payment system that reduces reliance on the dollar is a payment system the U.S. cannot monitor, cannot sanction, cannot use as a foreign-policy lever. The tariff is not about fairness in trade. It is about preserving the dollar’s monopoly on settlement — and protecting the credit card companies that ride on it.