Brazil will hold off on imposing fresh retaliatory tariffs on American goods, President Luiz Inacio Lula da Silva assured, backtracking on previous remarks to impose a countermeasure against Washington's 50% tariffs on Brazilian exports.
"We are negotiators," Lula declared Wednesday after signing a decree to grant a line of credit to small companies that have been hit by the US tariffs, introduced on 6 August. "We don't want, initially, to do anything that would deteriorate our relationship [with the US]."
Previously, Lula had signaled Brazil could introduce reciprocal tariffs on the US. However, previously this year, he also signed a new law on economic reciprocity outlining how the nation might react to trade restrictions — focusing on negotiation and actions to prevent further damage to Brazil.
US tariffs now account for over 35% of Brazilian exports to the US and account for around 4% of Brazil's overall exports, while some 700 more products still incur a 10% charge that was introduced in April.
Brazil has accumulated a deficit in goods and services with the US of more than $400 billion over the last 15 years, Finance Minister Fernando Haddad said in an interview aired early in July. The US surplus trade with Brazil totaled $2.3 billion in the first half of 2025 — a little more than seven times greater than in the same period last year, the US-Brazil Chamber of Commerce (Amcham) reported.
The US is Brazil's second-biggest trade partner after China, importing $40.3 billion of Brazilian products in 2024, based on the Brazilian Secretary of Foreign Trade.
Brazil will take the US tariffs to the World Trade Organization, claiming that these "blatantly disregard fundamental commitments made by the US to the WTO, like the most-favored-nation treatment and negotiated ceiling of tariff levels."
Industry Calls for Caution
Lula's move conforms to calls by several industry associations for caution amid the US tariffs.
"Not even from an economic or technical perspective, but we don't think the moment is right to retaliate," said Ricardo Alban, CNI president of Brazilian industry lobby group CNI, in July. "We continue to fight for negotiations as the means to persuade the American government that this step is a lose-lose situation for both nations.
A poll of Brazilian businesses by Amcham discovered that 86% are of the opinion that any retaliatory action would "increase bilateral tensions and decrease room for negotiations."
Haddad was set to sit down with US Treasury Secretary Scott Bessent on 13 August to lay out the tariffs, but the meeting was subsequently canceled.
Lula underlined that Brazil will also seek to develop trade with other nations. The government has been negotiating with fellow BRICS nations, namely Brazil, Russia, India, China, and South Africa, to enhance relationships among countries hit by the US tariffs. The BRICS group accounts for about 40% of the global economy, states the IMF.
Brazil will send a minimum of 500 business representatives to India in January to look out for opportunities in trade, energy, key minerals, and other areas, the government stated.
"Rather than lamenting losses, we'll find winning somewhere else," Lula said. "The world is wide and wants to negotiate with Brazil.
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