Brazil has formally opened its reciprocity process against the United States, taking the first procedural step toward possible retaliatory measures after Washington imposed steep new tariffs on a broad swath of Brazilian exports, including apparel.
The Brazilian government said in a statement Thursday that the U.S. tariffs were “unjustified and arbitrary” and that Brazil would “continue to defend its position in all appropriate forums.” The move opens diplomatic consultations with U.S. trade authorities and marks the first stage of a process that could lead Brazil to impose countermeasures under its 2025 Economic Reciprocity Law, approved unanimously by Congress and signed by President Luiz Inacio Lula da Silva last year. Read here
The law empowers Brasilia to respond to countries or trade blocs that impose measures deemed to restrict Brazilian economic interests. Officials said the review is examining whether the U.S. measures, issued under Section 301 of the U.S. Trade Act, fall within the statute’s scope. Brazil’s foreign ministry is expected to formally notify Washington and seek further talks, with the government stressing that negotiation remains its preferred route.
The dispute traces back to July, when the U.S. imposed a 25% surcharge on a wide range of Brazilian goods — including sugar, clothing, paper and steel — citing unfair trade practices, followed by an additional 12.5% tariff tied to forced-labor enforcement allegations. The tariff applied to all Brazilian goods outside a list of more than 2,100 exempted classifications, covering major exports such as beef, coffee, orange juice and civil aircraft parts. Washington’s trade office rejected exemption requests covering apparel, footwear, machinery, electrical equipment and paper, leaving Brazil’s garment exporters directly exposed to the higher duties.
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Brazilian officials had earlier paused plans for immediate retaliation, weighing concerns from industrial groups that reciprocal tariffs could raise input costs and stoke inflation given how integrated the two countries’ supply chains are. Sources told that the options under review extend beyond tariffs, potentially including the suspension of pharmaceutical and agricultural patents and curbs on U.S. audiovisual companies, an approach aimed at pressuring Washington while shielding Brazilian consumers from price increases.
Brazil has also filed a complaint with the World Trade Organization over the tariffs, and the U.S. has agreed to a consultation process at the global trade body. Brasilia’s government has said it will roll out credit lines and other support measures for affected sectors as the reciprocity review proceeds.
No final decision on countermeasures has been made, and officials say the process is likely to unfold over several months as consultations continue.