Brazil Promises Countermeasures as Washington Moves Forward with 25 Percent Tariff Package
A New Chapter in Bilateral Trade Relations
Brazil vows to retaliate if US imposes – The Brazilian government has announced firm intentions to respond to Washington’s latest trade decision, which introduces a 25 percent tariff on selected Brazilian goods entering the United States. According to statements released by President Luiz Inácio Lula da Silva’s administration, this development represents “a regrettable milestone” within the long-standing relationship between the two nations. The presidential office further characterized the move as stemming from sustained pressure applied to the White House by relatives of the far-right former president Jair Bolsonaro.
These newly announced duties are set to become operational on July 22. When that date arrives, Brazil will shift from its traditional position running a trade deficit with the United States to becoming the second-most heavily sanctioned nation by American trade policy, trailing only China in terms of tariff burden. The Office of the United States Trade Representative formally validated these measures late Wednesday evening, referencing what it termed Brazil’s “unreasonable acts, policies, and practices” that allegedly “harmed US commerce.”
Bolsonaro Family Influence and Political Dimensions
While American officials point to economic grievances, Brazilian leadership interprets the situation through a distinctly political lens. The presidential office stated on Wednesday that the tariffs resulted from “a narrative constructed with the active collaboration of the Bolsonaro family.” It went on to characterize these political figures as “false patriots who plotted and publicly defended actions against our country, driven by electoral objectives.”
The timing of these trade measures has not escaped attention in Brazilian political circles. Several politicians affiliated with Lula’s Workers’ Party have suggested the tariffs represent an effort by Donald Trump to shape outcomes in Brazil’s forthcoming presidential election. This interpretation gains weight given the current state of relations between Lula and Trump, which has experienced considerable volatility and currently sits at an historically low level.
Marco Rubio, the US secretary of state, who recently held discussions with Bolsonaro’s sons in Washington, sought to clarify American motivations. He posted that “President Lula and his government have not negotiated with the US in good faith,” adding that “for the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that.”
Election Stakes and Domestic Reaction
Lula is currently campaigning for another term, with voting scheduled for October. His principal opponent is Flávio Bolsonaro, a far-right senator and son of the former president. Flávio was selected as the presidential candidate following his father’s conviction for attempting to overturn the 2022 election results, which Lula won.
Interestingly, opinion polls—including one published on Wednesday—indicate that rather than damaging Lula politically, the tariffs have actually strengthened his standing against Flávio Bolsonaro. More than half of Brazilian citizens have attributed blame for the trade measures directly to the Bolsonaro family. This public sentiment prompted Flávio to request, during a USTR hearing last week, that Washington suspend the tariffs because they might inadvertently benefit Lula’s electoral prospects.
When his request went unheeded, the senator shifted criticism toward Lula on Thursday morning. He shared Rubio’s comments and declared: “Lula is no longer fit to be president of Brazil. We are on a plane without a pilot. Brazil’s Biden has become grumpy, reckless and a danger to our nation.”
Legal Framework and Retaliation Pathways
In response to the American decision, Lula’s office announced it would “immediately begin the procedures to invoke the instruments provided for under the Reciprocity Law.” This legislation empowers the Brazilian government to implement countermeasures against nations it deems to have engaged in unfair trade practices.
The legal foundation for these tariffs differs from previous American trade actions. Following a recent US Supreme Court decision that invalidated many of Trump’s tariffs imposed under alternative authority, Brazil becomes the first country targeted under this renewed approach. This new strategy relies on Section 301 of US trade law, which permits investigations into purportedly unfair commercial practices.
The USTR’s concluding report alleged that Brazil had implemented measures that “burden or restrict” American commerce. Among the cited concerns was Pix, a complimentary and widely utilized instant payment platform, which American officials argued disadvantaged US credit card corporations. Lula’s administration once again dismissed these accusations, stating that “Brazil does not recognise the legitimacy of investigations that are not grounded in multilateral trade rules.”
The USTR investigation originally commenced in July of the previous year. At that juncture, Trump referenced Bolsonaro’s ongoing legal proceedings as one justification for initiating the probe, asserting that the situation “should not be happening.” He characterized it as “a witch-hunt that must end IMMEDIATELY!” Meanwhile, Eduardo Bolsonaro, another of the former president’s sons who was then serving as a congressman, publicly claimed responsibility for motivating Trump—long considered an ally of his father—to pursue countermeasures against Brazil. Eduardo subsequently lost his congressional seat after relocating to the United States, where he continues to reside.
As both nations navigate this trade dispute, the outcome will likely extend beyond economics, potentially reshaping political alignments and electoral dynamics in both countries for years to come.
