The Brazilian government will impose tariffs on U.S. products if the North American country does not abide by the WTO’s ruling that the U.S. end cotton subsidies.

This Latin American country is the world’s fifth-largest cotton producer and the world’s third-largest cotton exporter, second only to the United States. Brazilian cotton exports are affected due to the US’s cotton export subsidy policy.

The Brazilian WTO representative Roberto Carvalho Azevedo said that a ministry team has discussed how to take economic sanctions against the United States for failing to comply with the WTO ruling, and the WTO has approved Brazil to impose economic sanctions against the United States.

The WTO ruling stated that the U.S. government’s cotton export subsidies have had a negative impact on Brazilian cotton farmers. The WTO authorized Brazil to levy 830 million U.S. dollars on U.S. goods.

However, the two countries reached an understanding on this issue in 2010. The United States said that the subsidy system will be revised in accordance with the new U.S. agricultural law and that the new agricultural law will be implemented this year. Brazil agrees to postpone the taxation of American products until the new law takes effect.

At the same time, the U.S. Congress has passed a new agricultural law and the new law will be implemented on September 30 this year. However, the new legal support continues to provide subsidies for cotton exports.