Brazil opens reciprocity review over U.S. tariffs. What happens now?
The Brazilian government has formally opened a process to assess whether new U.S. tariffs on Brazilian exports should be answered under the country’s Economic Reciprocity Law, a new legal tool for trade disputes.
In a statement released on Thursday, August 13, the presidential palace said the process began after the executive secretariat of Brazil’s foreign trade chamber Camex shared the request with the other members of its executive management committee.
Brazil’s foreign ministry MRE will also notify the U.S. government and request diplomatic consultations.
“The diplomatic consultations, aimed at mitigating or neutralizing the effects of the measures and countermeasures provided for under the Economic Reciprocity Law, reinforce the Brazilian government’s willingness to prioritize dialogue and negotiation in its international relations,” the government said in a statement.
The next step will be a formal review by Brazilian authorities to determine whether the U.S. tariff hike falls within the scope of the reciprocity law and whether the government may adopt the responses provided for in the legislation.
In other words, by opening the consultation process, Brazil is not immediately launching retaliation.
Late last month, Brazil had already initiated consultations over the U.S. tariffs at the World Trade Organization, a step within the WTO’s trade dispute settlement process.
The United States responded that it was “available to meet with the representatives of your mission on a mutually convenient date to hold consultations.”
China this week asked to join Brazil’s WTO consultations, a move seen by analysts interviewed by BBC News Brasil as a sign of support from the Asian giant in Brazil’s diplomatic dispute with Washington. They said, however, that Brazil’s consultation is likely to have limited practical effect given the WTO’s weakened state.
The table below compares the performance of Brazil’s main containerized export cargoes to the United States in the first half of 2026 against the same period a year earlier. The data come from Datamar:
Exports to the United States | H1 2026 vs. H1 2025 | TEUs
Exportações aos EUA | 1H26 -1H25 | TEUs
Source: DataLiner (click here to request a demo)
The U.S. tariff hike
On July 15, the U.S. government announced the end of an investigation into Brazilian trade practices it considered unfair and the imposition of 25% tariffs on a range of Brazilian products exported to the United States. The tariffs took effect on July 22.
Washington justified the measure by citing practices including alleged favoritism toward Pix, Brazil’s instant payment system; unfair trade practices; shortcomings in fighting corruption and deforestation; and differences over intellectual property laws.
U.S. Trade Representative Jamieson Greer said the measure was intended to protect U.S. economic interests and was necessary “to address unfair trade practices and ensure that American workers and companies can compete on fair terms.”
He also said negotiations between the two countries over the past year had not resolved their differences, but that Washington remained open to further talks with Brasília.
On July 23, the United States announced a new 12.5% tariff on Brazilian exports, alleging that Brazil had failed to adequately combat forced labor.
In addition to Brazil, 59 other U.S. trading partners are affected by the measure, with rates ranging from 10% to 12.5%. Those measures took effect on July 24.
In a statement, the Brazilian government called the action “arbitrary” and “unjustified” and said the U.S. government had “chosen to manipulate an issue dear to human rights and to the struggle of workers around the world to accuse 59 countries and the European Union of unfair practices.”
The Economic Reciprocity Law
With Thursday’s announcement, Brazil has begun studying the possibility of retaliating against the United States over the tariffs imposed on Brazilian exports.
The Economic Reciprocity Law is a new instrument approved by Congress in April 2025 and signed into law by President Luiz Inácio Lula da Silva in July of that year — the same week that Donald Trump had announced 50% tariffs on Brazilian products.
The mechanism establishes when and how Brazil may retaliate against measures such as those imposed by Trump.
The law sets out the “criteria for suspending trade concessions, investment concessions and obligations related to intellectual property rights in response to unilateral measures adopted by a country or economic bloc that negatively affect Brazil’s international competitiveness.”
The Economic Reciprocity Law was approved by a broad majority in Congress, in an unusual alignment between government and opposition lawmakers, who have increasingly rarely voted together in recent years.
Under the bill approved by Congress and signed by the president, the law may be used in three circumstances.
The first is when a country or economic bloc unilaterally threatens or imposes trade, financial or investment barriers with the aim of interfering in Brazil’s “sovereign” decisions.
The second is when a country or bloc violates the terms of a trade agreement with Brazil, harming the country and Brazilian companies.
The third applies when a country imposes trade measures against Brazilian products because of environmental requirements that are stricter than those set out in Brazilian law.
If such a requirement is unilateral, is not based on multilateral agreements and negatively affects Brazilian exports, Brazil may consider it a measure subject to retaliation under the law.
The decree regulating the law also lists the tools available to the government in response to tariffs.
The main instrument is the imposition of tariffs on goods or services imported from the country that initiated the tariff dispute.
Under the decree, Brazil may apply additional tariffs or surcharges to specific products, making them more expensive and therefore less competitive in the Brazilian market.
Another mechanism allows Brazil to suspend compliance with terms of trade agreements signed with the country or bloc considered the “aggressor.”
That could affect import or export quotas previously agreed between the parties.
Although the measure is called the Economic Reciprocity Law, the decree regulating it preserved the idea that its application should not follow an unrestricted “eye for an eye” logic.
The law, for example, states that retaliatory measures should “minimize the impact on economic activity and avoid administrative burdens and costs.”
That provision reflects concern from the government and Congress that tariffs on certain imported goods could end up hurting production chains already established in Brazil that depend on those inputs to produce goods or services.
What are the next steps under the law?
The decree sets out the stages for adopting retaliatory measures.
The first is the creation of committees to assess the case and the holding of public consultations with representatives of interested parties.
In practice, the government has already started this stage by forming a commission with business leaders from different sectors to discuss its response to the U.S. tariffs.
In the decree signed by Lula, the group assessing the case is called the Interministerial Committee for Negotiation and Economic and Trade Countermeasures.
It is chaired by the minister of development, industry, trade and services — Vice President Geraldo Alckmin — and includes representatives from the Chief of Staff’s Office, the Finance Ministry and the foreign ministry.
Brazilian countermeasures are also reviewed by Camex, with participation from public administration officials and private-sector representatives.
The second stage involves setting deadlines to analyze demands submitted by the sectors consulted.
The third step is the proposal and implementation of measures, with possible diplomatic consultations and negotiations.
The decree also authorizes the executive branch to adopt retaliation on a provisional basis while the previous stages are underway.
It also provides for the creation of a monitoring commission to track the retaliatory measures, which the government may revoke or change depending on ongoing diplomatic negotiations.
Source: BBC