Brazil has threatened to impose a 50 percent tariff on American goods in retaliation to Donald Trump’s announcement of a similar duty on Brazilian exports, raising fears of an escalating trade war between the two countries.
“If he charges us 50 percent, we’ll charge him 50 percent,” Brazilian President Luiz Inácio Lula da Silva said in an interview, a day after Trump accused Brazil of targeting former president Jair Bolsonaro with a “witch-hunt” and vowed to slap steep tariffs on Brazilian imports.
Lula said Brazil could take the dispute to the World Trade Organization, push for international investigations and demand formal explanations from Washington. However, he underscored that Brazil’s key tool of response would be the country’s new Reciprocity Law, recently passed by Brazil's Congress to protect its economy from tariff actions by foreign governments.
Lula dismissed Trump’s assertion that US-Brazil economic relations were “far from reciprocal”, calling the claim inaccurate. “Any increase in tariffs by the US will be addressed accordingly,” he said in a separate statement on Wednesday.
On Thursday morning, Lula met with cabinet ministers to formulate Brazil’s response to the proposed tariffs. Officials said a study group would be set up to explore retaliatory measures.
Trump, in a letter to Lula published on social media, warned that any counter-tariff from Brazil would be met with an additional duty from Washington. “If for any reason you decide to raise your tariffs, then, whatever the number you choose to raise them by, will be added onto the 50 percent that we charge,” he wrote.
The Brazil move is part of a wider tariff offensive by Trump, who this week unveiled plans for a fresh wave of levies targeting countries including Bangladesh, Japan and South Korea. While the White House had initially scheduled the tariff hikes for Wednesday, Trump extended the deadline by three weeks to August 1, giving countries a final window to strike trade deals with his administration.
The move has triggered alarm in Brasília and raised fears of a major trade rupture between the two largest economies in the Americas — with analysts warning it could push Brazil closer to China.
In a sharply worded letter sent to President Luiz Inácio Lula da Silva on Wednesday, Trump accused Brazil of maintaining “unfair trade barriers” and of politically persecuting former president Jair Bolsonaro, now facing trial for allegedly attempting to overturn the 2022 election result. Trump said the tariffs would penalise these actions.
The ideological tone of Trump’s letter and the economic rationale behind the tariff hike surprised officials in Brasília. Over the past 15 years, the United States has recorded a cumulative $410 billion trade surplus with Brazil, including $28.6 billion last year alone — its third-largest globally. Lula dismissed Trump’s accusations as “irresponsible” and warned Brazil would not be intimidated.
Inside the government, however, there is caution. Direct tariff retaliation could raise costs for domestic industries that rely heavily on US machinery and parts. As a result, the Lula administration is reportedly weighing less direct but legally permissible countermeasures under the Reciprocity Law, including halting medicine and seed patents, suspending royalty payments, and taxing American corporate earnings.
Trump, anticipating retaliation, has already threatened to escalate further. In his public letter, he warned that any Brazilian counter-tariff would be met with an additional duty on top of the existing 50 percent.
