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| Brazil tariffs |
Brazil has firmly decided not to impose reciprocal tariffs on US goods despite the 50% US tariffs on Brazilian products. President Luiz Inacio Lula da Silva emphasized negotiation over retaliation to maintain stable bilateral relations. The administration supports affected small businesses through credit measures to soften the tariff impact.
Economic context and trade imbalance with the US
The US tariffs affect over 35% of Brazilian exports to the US, accounting for about 4% of Brazil’s total exports. Despite this, Brazil holds a significant trade deficit with the US—over $400 billion in goods and services in the past 15 years. The US’s trade surplus with Brazil more than septupled to $2.3 billion in the first half of 2025, underscoring asymmetrical economic ties.
Brazil ranks the US as its second-largest trading partner after China, exporting $40.3 billion worth of goods in 2024. Brazil plans to challenge the tariffs at the WTO, claiming the US measures violate the most-favored-nation principle and negotiated tariff ceilings.
Industry cautions against retaliation; Brazil seeks new markets
Brazilian industry groups urge restraint against reciprocal tariffs, calling for diplomatic negotiations. An Amcham survey found 86% of Brazilian firms fear retaliation would worsen trade tensions and limit negotiation space.
Meanwhile, Brazil is expanding trade cooperation with BRICS nations, focusing on critical minerals, energy, and broader economic ties. President Lula plans to send 500 business delegates to India in January to explore opportunities beyond the US market.
ScrapInsight Commentary
Brazil’s refusal to retaliate against US tariffs reflects a pragmatic approach balancing economic pain and diplomatic stability. The decision signals Brazil’s strategic pivot to BRICS and diversification amid escalating US trade tensions. Market watchers should monitor potential shifts in Brazil’s export flows and emerging partnerships for critical raw materials.
