Brazil Starts Process for Reciprocating US Tariffs

Brazil’s Move to Counter US Tariffs Accelerates Trade Negotiations

Brazil has officially begun the process to impose reciprocal tariffs on the United States following the 50% tariffs the US applied on Brazilian goods in August 2025. Vice-President and Trade Minister Geraldo Alckmin announced that Brazil’s foreign trade chamber, Camex, now has 30 days to decide how to respond under Brazil’s economic reciprocity law. This legislation permits retaliation through tariffs on goods, services, and intellectual property, aiming to protect Brazil’s economic sovereignty and accelerate trade talks with the US.

President Luiz Inacio Lula da Silva initially advocated for negotiation over retaliation. However, Brazil’s current move to prepare reciprocal tariffs reflects a firm stance amid stalled talks. The government also supports local companies impacted by US tariffs, offering financial aid and credit lines, especially for small businesses. Moreover, Brazil has requested the World Trade Organization’s intervention to resolve the trade dispute, signaling the escalating trade tensions between the two nations.

Impact on US-Brazil Trade Relations and Economy

The United States maintains a substantial trade surplus with Brazil, amounting to over $400 billion in the past 15 years. Finance Minister Fernando Haddad highlighted that this surplus surged to $2.3 billion in the first half of 2025, marking a sevenfold increase from the previous year. This economic imbalance, paired with US tariff measures, pressures Brazil’s export sectors. As a result, Brazil’s decision to initiate reciprocal tariffs signals a strategic shift to protect its market and leverage negotiations with the US for better trade terms.

SuperMetalPrice Commentary:

Brazil’s initiation of reciprocal tariffs underscores rising protectionist tendencies amid global trade uncertainties. While the move aims to protect Brazil’s sovereignty and stimulate faster negotiations, it risks escalating tensions with the US, potentially disrupting metals and commodity markets dependent on bilateral trade flows. Market participants should monitor this dispute closely, as tariff escalations can influence raw material prices and supply chains, particularly for Brazilian exports like iron ore and agricultural commodities.