Brazil readies 'tough' response to new US tariffs

Brazil's government is actively preparing retaliatory measures against recent U.S. tariffs, with top ministers convening to discuss options that could include curbs on U.S. audiovisual companies and the suspension of pharmaceutical and agricultural patent protections. These potential actions align with Brazil's reciprocity law, a measure President Luiz Inácio Lula da Silva pledged to invoke after the Trump administration imposed a 25% tariff on numerous Brazilian products.

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How we proceed from here will depend on the instructions the president gives us, but it is highly unlikely there won't be a tough response

The strategy focuses on targeting U.S. intellectual property rights and audiovisual sector interests, a departure from traditional import tariffs. This approach is designed to exert pressure on Washington while simultaneously shielding Brazilian consumers from potential price increases. One source indicated that a "tough response" is highly probable, depending on President Lula's final directives.

Further options being considered include revisiting countermeasures studied previously, such as restricting dividend and royalty remittances by U.S. audiovisual firms. The government is also contemplating the suspension of patent protections for pharmaceuticals and agricultural seeds. Vice President Geraldo Alckmin emphasized that the reciprocity law is a legitimate instrument for defending "the national interest, the interests of Brazilians and the Brazilian economy," rather than a purely retaliatory measure.

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The law is not retaliatory. There is no retaliation. It is a legitimate legal instrument created to defend 'the national interest, the interests of Brazilians and the Brazilian economy'

In parallel, the Finance Minister announced plans to introduce credit lines and other support measures for affected sectors by early August, reviving a program initiated after previous U.S. tariffs. While committing fewer public resources this time, the government remains dedicated to its fiscal targets. The minister asserted that Brazil will not "bow its heads or bend to foreign interests" but remains open to diplomacy and negotiations.

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We will not bow our heads or bend to foreign interests. That does not mean we will not be open to negotiations. We will remain open to diplomacy and negotiations, whether with the United States or with any other country that treats us with due respect