Lula to sign Brazil's new reciprocal tariff law amid US trade tensions

Brazilian President Luiz Inacio Lula da Silva will officially sign a new law on Monday that allows Brazil to respond to unfair foreign trade practices. The law, passed by Congress in April, will let the government impose reciprocal tariffs on countries that hurt Brazil’s economy with their trade policies.

Lula’s Chief of Staff, Rui Costa, said the decree will be published in Brazil's official gazette on Tuesday. The announcement comes days after US President Donald Trump said he would place a 50% tariff on Brazilian exports.

In response to Trump's announcement, Brazil is preparing to fight back. Lula's administration plans to match the 50% tariff on US goods entering Brazil.

"Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage," Lula said firmly in an X post.

He added that the legal matters concerning Brazil's internal governance -- including investigations related to past coup attempts -- are handled solely by Brazil's Judicial Branch and should not be interfered with by any foreign country.

BRAZIL’S EFFORTS TO AVOID TRADE CONFLICT

While Vice President Geraldo Alckmin said on Monday that the government has set up a working group to discuss the US tariffs with business leaders. The first meeting will take place Tuesday morning, followed by another session later in the day with agribusiness leaders.

The group plans to keep meeting regularly to find the best solutions. Alckmin said that the tariffs would also hurt US companies, so Brazil will talk to them as well. "US companies will also be hit by the tariffs announced by the US, so we will also talk to them," he said.

BRAZIL CHALLENGES US TRADE FIGURES

Meanwhile, Lula questioned the accuracy of US trade deficit claims, saying that the US has actually had a trade surplus with Brazil.

"The claim regarding a US trade deficit in its commercial relationship with Brazil is inaccurate. Statistics from the US government itself show a surplus of $410 billion in the trade of goods and services with Brazil over the past 15 years," Lula explained.

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With inputs from Reuters

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