Key Points
- The US announced it will impose a 25% customs duty on Brazilian products, scheduled to take effect on 22 October.
- The Brazilian Ministry of the Treasury stated that it could enact the economic reciprocity law if negotiations stall.
- The new US tariffs are expected to negatively impact Brazil's exports by approximately 7.4 billion dollars.
By the Numbers
The Brazilian government has put a trade preparedness plan into action to respond to the US decision to impose a 25% customs duty on Brazilian products. Treasury Secretary Dario Durigan confirmed that the country could use economic reciprocity measures if bilateral negotiations fail.
This potential step is based on Reciprocity Law No. 15.122, approved by President Lula da Silva on 11 April 2025. This law allows Brazil to retaliate at the same rate in the event of unjust or illegal trade sanctions directed against the country. Accordingly, Brazil will also have the right to impose taxes at a similar rate on products imported from the US.
According to data from the Ministry of Commerce, the aforementioned additional taxes are expected to affect 18% of Brazil's exports to the US and cause an approximately 7.4 billion dollar blow. The Brazilian government argues that the overall macroeconomic impacts will be limited and that the strong trade relations maintained with China provide a margin of safety for the trade volume deficit.
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Frequently Asked Questions
- What is the Reciprocity Law that Brazil can resort to?
- The law, approved on 11 April 2025, allows for economic measures such as import taxes to be taken in response to unjust trade sanctions against Brazil.
- How much will the new tariffs applied by the US affect the Brazilian economy?
- According to ministry data, the new taxes will cover 18% of Brazil's exports to the US, creating an impact of approximately 7.4 billion dollars.
- What is the justification for this new tariff decision by the US?
- The US administration cites the Pix system, Supreme Court rulings, and claims that Brazil engages in unfair trade practices as justifications.
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