Brazil vows retaliation after US slaps 25% tariffs on imports

Brazil has pledged to retaliate after the United States confirmed it will impose 25% tariffs on a range of Brazilian imports, escalating trade tensions between the two countries and prompting Brasília to prepare countermeasures under its Economic Reciprocity Law, The Guardian reports.

The tariffs, confirmed by the Office of the United States Trade Representative (USTR), are scheduled to take effect on July 22. The USTR said the measures were prompted by what it described as Brazil's "unreasonable acts, policies, and practices" that have "harmed US commerce."

President Luiz Inácio Lula da Silva's office condemned the decision, calling it "a regrettable milestone" in bilateral relations and accusing the family of former president Jair Bolsonaro of lobbying Washington to adopt the measures.

According to the presidency, Brazil "will immediately begin the procedures to invoke the instruments provided for under the Reciprocity Law," while also pursuing action through the World Trade Organization's dispute settlement mechanism.

Lula's office argued that the tariffs stem from "a narrative constructed with the active collaboration of the Bolsonaro family," adding: "They are false patriots who plotted and publicly defended actions against our country, driven by electoral objectives."

U.S. Secretary of State Marco Rubio defended Washington's decision, writing that "President Lula and his government have not negotiated with the US in good faith." He added, "For the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that."

The dispute comes ahead of Brazil's presidential election in October, where Lula is seeking re-election against Flávio Bolsonaro, son of the former president. Flávio Bolsonaro blamed Lula for the tariffs after urging Washington to suspend the measures.

The USTR's findings also cited Brazil's widely used Pix instant payment system, arguing it disadvantages U.S. credit card companies. Brasília rejected the allegations, stating that "Brazil does not recognise the legitimacy of investigations that are not grounded in multilateral trade rules."

By Vafa Guliyeva