“I Want to Negotiate”: Lula in No Rush to Enact Reciprocity Law Against U.S. Over Tariffs (2025)

• Why Is Brazil Hesitating to Retaliate Against U.S. Tariffs?
• How Does Brazil’s Reciprocity Law Work?
• What’s Blocking Negotiations Between Brazil and the U.S.?
• Could Retaliation Backfire on Brazil’s Economy?
• What’s Next in the Trade Standoff?
• FAQs: Brazil-U.S. Trade Dispute Explained

Brazilian President Luiz Inácio Lula da Silva has signaled a preference for diplomacy over immediate retaliation after the U.S. imposed a 50% tariff on Brazilian goods. While Brazil’s government has initiated a formal review under its Economic Reciprocity Law, Lula emphasized his willingness to negotiate, contrasting with the TRUMP administration’s apparent reluctance. The process, led by Brazil’s Chamber of Foreign Trade (Camex), could result in retaliatory measures targeting U.S. intellectual property and services—but Lula’s “peace and love” approach suggests a strategic pause. Here’s the full breakdown of the escalating trade tensions and what’s at stake.

Why Is Brazil Hesitating to Retaliate Against U.S. Tariffs?

President Lula’s remarks to Radio Itatiaia on Friday (August 29, 2025) revealed a deliberate stance: “I’m in no hurry because I want to negotiate.” This comes after former U.S. President Donald Trump’s controversial 50% tariff on Brazilian exports, which Trump framed as retaliation for Brazil’s judicial investigations into ex-President Jair Bolsonaro. Lula’s team has struggled to open dialogue with U.S. officials—a meeting between Brazil’s Finance Minister Fernando Haddad and U.S. Treasury Secretary Scott Bessent was abruptly canceled two weeks ago, reportedly due to interference by Bolsonaro-aligned lawmakers.

How Does Brazil’s Reciprocity Law Work?

Brazil’s Congress passed the Economic Reciprocity Law in April 2025, allowing proportional responses to trade barriers. Vice President Geraldo Alckmin confirmed that Camex now has 30 days to determine whether the U.S. tariffs violate international trade rules. If approved, a inter-ministerial task force will design countermeasures—likely focusing on suspending intellectual property royalties and streaming service payments, as targeting physical goods could raise costs for Brazilian importers. “This law is a necessary tool,” Alckmin noted during his visit to Mexico.

What’s Blocking Negotiations Between Brazil and the U.S.?

Sources told Reuters that Brazil’s attempts to engage the U.S. since the tariffs took effect earlier this month have hit a wall. The Trump administration has dismissed Brazil’s complaints, while Bolsonaro’s allies actively sabotage talks. Meanwhile, Brazil’s WTO case against the tariffs languishes due to the organization’s dysfunctional dispute system. “We’d prefer multilateral solutions, but the WTO isn’t operational,” admitted one Brazilian official.

Could Retaliation Backfire on Brazil’s Economy?

Analysts warn that retaliating against U.S. tech and entertainment giants might provoke further escalation. However, BTCC market strategist Rafael Costa suggests Brazil holds leverage: “U.S. firms earn billions annually from Brazilian licensing fees. Suspending those payments WOULD sting—but it’s a double-edged sword if it triggers capital flight.” Data from TradingView shows Brazil’s Bovespa index dipped 1.2% post-tariff announcement, reflecting investor unease.

What’s Next in the Trade Standoff?

Alckmin hopes the Camex review will pressure the U.S. to negotiate: “This could accelerate dialogue.” Yet with Trump labeling Brazil’s Bolsonaro probes a “witch hunt,” tensions seem entrenched. Lula’s quip—“If Trump wants to talk, ‘Lulinha peace and love’ is back”—hints at his tactical patience. The Camex report, due by late September, will shape Brazil’s next move.

FAQs: Brazil-U.S. Trade Dispute Explained

What triggered the U.S. tariffs on Brazil?

Trump cited Brazil’s legal actions against ex-President Bolsonaro as justification, calling them politically motivated.

How long until Brazil decides on retaliation?

Camex has 30 days (until ~September 28, 2025) to recommend measures after its review begins.

Would Brazil target U.S. agricultural exports?

Unlikely—sources say Brazil prefers minimizing domestic economic fallout by focusing on services and IP.