President Luiz Inácio Lula da Silva stated that Brazil will respond to the 50 percent tariff on all its exports to the United States by invoking the Reciprocity Law.
On social media, the president defended Brazil’s sovereignty and rejected US President Donald Trump’s claim that the tax is due to a trade deficit.
“Any unilateral tariff increase will be met with a response under Brazil’s Economic Reciprocity Law. Sovereignty, respect, and the unwavering defense of the interests of the Brazilian people are the values that guide our relationship with the world,” said the president.
The law authorizes the Executive Branch, in coordination with the private sector, to “adopt countermeasures such as import restrictions on goods and services or the suspension of trade concessions, investment, and obligations related to intellectual property rights, as well as other commitments established in any of the country’s trade agreements.”
The Brazilian government refutes the claim of a US trade deficit, stating: “The US government’s own statistics show that the country has recorded a surplus of approximately US$ 410 billion in trade in goods and services with Brazil over the past 15 years.”
Lula also stated that Brazil is a sovereign country “with independent institutions that will not accept being controlled by anyone.”
In the document sent to the Brazilian president, Trump cites former President Jair Bolsonaro — who is on trial in Brazil’s Supreme Court for attempting a coup d’état — to justify his attack on the country. He also refers to Supreme Court orders issued against Bolsonaro supporters residing in the United States.
“The legal proceedings against those who planned the coup d’état are the sole responsibility of the Brazilian justice system and, therefore, are not subject to any interference or threat that could undermine the independence of national institutions,” Lula replied.
The Brazilian president also responded to Trump’s criticism of the Supreme Court’s rulings against social media profiles involved in hate speech and the spread of fake news. Lula stated that “in the context of digital platforms, Brazilian society rejects content that promotes hate, racism, child pornography, scams, fraud, and discourse against human rights and democratic freedom.”
“In Brazil, freedom of expression is not to be confused with aggression or violent practices. To operate in our country, all national and foreign companies are subject to Brazilian law,” he wrote.
Before publishing the statement, President Lula coordinated an emergency meeting at the Planalto presidential palace, attended by Ministers Fernando Haddad (Finance), Mauro Vieira (International Relations), Rui Costa (Chief of Staff), and Sidônio Palmeira (Communication Secretariat), as well as Vice President and Minister of Development, Industry, and Trade, Geraldo Alckmin.
Nobel laureate berates Trump
The 50-percent tariff on Brazilian products announced by US President Donald Trump has also reverberated in his own country.
US economist Paul Krugman, a columnist for The New York Times and winner of the 2008 Nobel Prize for Economics, called his president “evil and megalomaniacal.”
“I usually don’t do evening posts. […] But Trump’s latest letter, imposing a 50 percent tariff on Brazil, marks a new departure, and I think merits a special bulletin. After all, it’s both evil and megalomaniacal,” he wrote in a post entitled Trump’s Dictator Protection Program – Using tariffs to fight democracy.
Krugman said there are no economic reasons to justify such a move, describing it as an attempt to get Jair Bolsonaro off the hook for attempting a coup d’état.
“Notice that Trump barely even pretends that there’s an economic justification for this action. This is all about punishing Brazil for putting Jair Bolsonaro on trial,” he wrote. In his blog post, he summarizes who Bolsonaro is in his opinion.
“Bolsonaro, as most readers probably know, is Brazil’s previous president, who lost the last election — but tried to stay in power through a coup overturning that election. Of course that sounds familiar,” the text reads.
Krugman refers to the episode of the storming of the Capitol in 2021 by supporters of Donald Trump after his defeat at the polls by Joe Biden. The invaders were convicted in 2023, but Trump granted them a presidential pardon at the start of his second term.
In his message to the Brazilian government, Trump showed concern about freeing his political ally from conviction in the investigation targeting him at the Supreme Court.
“The way Brazil has treated former President Bolsonaro, a highly respected leader around the world during his term, including the United States, is an international shame. This trial should not be taking place. It’s a witch hunt that should be over immediately!” the post says.
In Krugman’s view, Trump is a “wannabe dictator” who is trying to help others like him.
“Now Trump is trying to use tariffs to help another wannabe dictator. If you still thought America was one of the world’s good guys, this should tell you whose side we’re on these days,” he argued.
International trade
The US economist uses 2022 data from the World Trade Organization showing that Brazil has China as its largest trading partner, with 26.8 percent of its exported products. The US comes in second with 11.4 percent.
“Does Trump really imagine that he can use tariffs to bully a huge nation, which isn’t even very dependent on the US market, into abandoning democracy?” he asks.
In the Nobel laureate’s opinion, the measures unveiled by Trump are also arguments for opening impeachment proceedings against him.
Industry shows concerb
The imposition of 50% tariffs on Brazilian products by US President Donald Trump’s government has been met with concern by the Brazilian productive sector. Some organizations claim that the measure makes exports unviable and warn of the risks to the Brazilian economy.
In a statement, Brazil’s National Confederation of Industry (CNI) said there was no economic fact to justify the decision. The organization calls for intensified negotiations to preserve the relationship with one of Brazil’s top trading partners.
“The impact of these tariffs could be serious for our industry, which is deeply interconnected with the US production system. A break in this relationship would do a lot of damage to our economy. That’s why, for the productive sector, the most important thing now is to intensify negotiations and dialog in a bid to reverse this decision,” CNI President Ricardo Alban said in a statement.
Agriculture
Another sector likely to be heavily affected by the tariff is the meat sector. In the view of the Brazilian Association of Meat Exporters (ABIEC), Trump’s measure will make the cost of Brazilian meat so high it will make it impossible to sell the product to the US.
“ABIEC reinforces the importance of geopolitical issues not becoming barriers to global supply and to food security, especially in a scenario that requires cooperation and stability between countries,” the note reads.
The association also argued for the resumption of negotiations and said it is willing to contribute to the dialogue. “We are willing to engage in dialogue, so that measures of this nature do not have an impact on the Brazilian productive sectors or on US consumers, who receive our products with quality, regularity, and affordable prices,” the association added.
The Parliamentary Agricultural Front (FPA) also expressed concern about Trump’s move. In a statement, it stressed that the measure represents a warning to trade and political ties between the two nations and affects Brazilian agribusiness.
“The new tax rate has direct repercussions and affects Brazilian agribusiness, with impacts on the exchange rate, the consequent increase in the cost of imported supplies and the competitiveness of Brazilian exports,” it declared.
“Faced with this scenario, the FPA advocates a firm and strategic response. It is time for caution, sharp diplomacy, and Brazil’s active presence at the negotiating table,” the statement goes on to read.
International trade
The Brazilian Foreign Trade Association (AEB) said it was surprised and outraged to hear that the US has increased its import tariff on Brazilian products to 50 percent. According to the association’s executive president, José Augusto de Castro, this is not an economic measure, but a political one with a major economic impact.
“It is certainly one of the highest taxes a country has ever been subjected to in the history of international trade, only applied to the worst enemies, which has never been the case with Brazil,” said AEB Executive President José Augusto de Castro.
In addition to trade difficulties with the US, he said, the announcement from the White House could create a negative image of Brazil and make importers from other countries afraid to do business with our companies—after all, who would want to get into trouble with President Trump?”
AEB believes that common sense will prevail and the tax will be reversed.
ABr
