Trump tariffs: Lula activates Brazil’s reciprocity law while stopping short of immediate countermeasures

Brazil has formally opened a process under its Economic Reciprocity Law in response to US President Donald Trump's tariffs on Brazilian goods. President Luiz Inácio Lula da Silva said Brazil invoked the law to show that the country “respects itself” and will defend its interests. Brazil’s Foreign Ministry has notified Washington and requested diplomatic consultations. The process gives both sides time to negotiate measures that could reduce or eliminate the impact of the US tariffs.

Trump tariffs: What could Brazil do?

The reciprocity process does not automatically trigger matching tariffs. Brazilian authorities will first assess the impact on domestic industries and examine possible responses through the government’s foreign trade chamber, CAMEX. Public consultations form part of the process.

Brazil’s Reciprocity Law allows proportional measures when foreign actions harm Brazilian competitiveness. Possible responses include tariffs on US goods, restrictions on services or imports, suspension of trade concessions and measures affecting intellectual property.

Brazil has previously examined options involving US audiovisual companies and pharmaceutical patents.

Officials are cautious about moving too quickly. Retaliatory measures could disrupt Brazilian supply chains, increase costs and add to domestic inflation.

The government is therefore using the mechanism as both a potential defensive tool and negotiating leverage. Brazil also plans to challenge the US measures through the World Trade Organization and has offered support, including credit lines, to sectors hit by the tariffs.

Lula open to direct talks with Trump

Lula has warned Washington against interfering in Brazil’s domestic affairs and the October 2026 presidential election, while saying he is open to direct talks with Trump.

Lula is seeking re-election against Senator Flávio Bolsonaro, the son of former president Jair Bolsonaro and a prominent Trump ally.

Why did Trump impose the tariffs?

The latest dispute escalated in July 2026, when the US imposed a 25 per cent tariff on many Brazilian products under Section 301 of the US Trade Act. The US Trade Representative cited what it called unreasonable or discriminatory Brazilian practices involving digital trade and electronic payments, including the PIX system, preferential tariffs, intellectual-property protection, ethanol market access, anti-corruption measures and illegal deforestation. The tariffs took effect around July 22.

Major Brazilian exports have been exempted, including coffee, beef, oranges and orange juice, some energy products, fertiliser and aerospace products and aircraft parts.

The 25 per cent measure affects roughly 18 per cent of Brazil’s exports to the US

The tariffs could hit goods worth about $7.4 billion based on recent trade data. A separate 12.5 per cent tariff linked to alleged weak enforcement of forced-labour restrictions can apply to Brazilian products in some categories. Where the two measures overlap, duties can reach 37.5 per cent, affecting products such as certain sugar, apparel, paper and steel.

US-Brazil trade dispute becomes a political fight

Brazil has called the US tariffs “unjustified and arbitrary” and pointed to the US goods trade surplus with Brazil. It said many US products already enter Brazil duty-free, while Brazil maintains a relatively low average applied tariff on US imports.

Trump had previously threatened or announced tariffs of up to 50 per cent on some Brazilian goods, with some measures linked to US concerns over legal proceedings involving Jair Bolsonaro.

Brazil’s Reciprocity Law was enacted in 2025 partly in response to such unilateral trade actions. It permits proportional countermeasures when foreign policies damage Brazil’s competitiveness.

Visa disputes involving Brazilian and US diplomats have added to tensions. The two nations also fought over ambassadorial appointments and diplomatic access.