Courthhouse News Service
15/7/2025
Following Trump’s 50% tariff hike on Brazilian goods, a decree creates fast-track process for countermeasures against countries targeting Brazilian interests.
Por Marília Marasciulo
RIO DE JANEIRO (CN) — A week after President Donald Trump announced 50% tariffs on Brazilian products, President Luiz Inácio Lula da Silva signed a decree regulating a new law that could serve as the legal basis for retaliating against the United States.
The Economic Reciprocity Law, approved by the Brazilian Congress in April and now formally implemented, allows the government to suspend trade concessions, investments and even intellectual property rights of countries that impose unilateral measures against Brazilian interests.
Although the decree does not mention the U.S., its publication on Tuesday is widely seen as a response to the tariff escalation pushed by Trump, who framed the sanctions as a response to a Supreme Court case against former President Jair Bolsonaro, calling it a “witch hunt.” On Monday, Brazil’s Office of the Prosecutor General recommended Bolsonaro’s conviction, along with seven others, for attempting a coup d’état.
The new law applies in three scenarios: when a foreign country interferes in Brazil’s sovereign decisions, violates existing trade agreements or imposes environmental restrictions stricter than Brazil’s legislation. That includes, for instance, unilateral barriers on Brazilian commodity imports based on non-negotiated environmental standards.
According to Igor Machado, a tax attorney at São Paulo-based firm Meirelles Costa Advogados, Brazil previously relied mainly on the World Trade Organization’s dispute resolution mechanisms to challenge unfair foreign trade practices.
“Now the country has a legitimate and autonomous legal tool to respond more effectively to unfair trade practices,” he said. “Responses can be faster, more coordinated and based on objective criteria. That strengthens both the legal and political legitimacy of any retaliation, even before international bodies.”
The decree outlines two distinct paths for adopting countermeasures: a standard process involving public consultations and technical review by Brazil’s foreign trade chamber (Camex) and an emergency path that enables immediate provisional measures by a special interministerial committee. That committee is chaired by Vice President Geraldo Alckmin and includes the ministers of the Civil House, Finance and Foreign Affairs.
Authorized retaliations include additional import tariffs and the suspension of patent rights and other trade obligations. The government is reportedly considering measures targeting the pharmaceutical and audiovisual sectors, aiming to impact U.S. companies without triggering domestic inflation.
Fabrício Pasquot, associate professor of International Law at the Federal University of Minas Gerais, said the decree’s immediate effects include strengthening Brazil’s negotiating position, deterring future hostile actions and offering greater protection to domestic industry and exporters.
“Suspending trade concessions is the strongest remedy available in cases of international trade violations, such as under WTO agreements signed by Brazil, the U.S., and other countries,” he said.
In the long run, Pasquot argued that the law offers greater legal predictability, supports market diversification and bolsters Brazil’s industrial and trade policy.
Since last week, the Brazilian government has intensified public campaigns highlighting national sovereignty, positioning recent measures within a broader effort to defend the country’s autonomy in trade and foreign affairs.
Despite the tough rhetoric, the law requires that any response be proportional and seek to avoid negative impacts on Brazil’s economy. Countermeasures may be revised or suspended depending on the progress of diplomatic negotiations, which are also provided for in the decree.
In a statement, Brazil’s National Confederation of Industry urged the government to act cautiously before enacting any retaliation. During a meeting with Lula’s cabinet, the confederation’s president, Ricardo Alban, called for exhausting all diplomatic channels before adopting trade sanctions against Washington.
The industry group also requested a 90-day delay before the U.S. tariffs take effect. According to internal estimates, the measure could cost Brazil at least 110,000 jobs and negatively impact its GDP.
So far, the government has not announced which sectors will be targeted but has stated that its response will be ready before the U.S. tariffs take effect on Aug. 1.
Disponível em: Brazil enacts law enabling economic retaliation after US tariffs | Courthouse News Service
