Overview
- Brazil formally activated its 2025 Law of Economic Reciprocity on Thursday to evaluate responses to U.S. tariffs and has asked Washington for bilateral consultations while keeping a WTO challenge active.
- The step is an administrative review, not an automatic imposition of retaliatory duties, and gives Brazilian authorities a range of proportional options beyond tariffs.
- Washington's measures, announced in July, raised duties on many Brazilian products with reported rates commonly between about 12.5% and 25% and affecting roughly 18% of Brazil's exports to the U.S.
- Diplomatic ties have worsened: the U.S. revoked the Brazilian ambassador's visa, Brazil is withholding agrément for U.S. nominee Daniel Perez until after the election, and President Lula says he is seeking direct contact with President Trump.
- The dispute puts exporters of machinery, sugar, ethanol, wood and footwear at immediate risk and could prolong trade and political tensions through Brazil's campaign season, complicating negotiations and supply chains.