Brazil starts reciprocity review over US 25% tariffs

Brazil’s government said on Thursday it has formally opened a reciprocity process to examine potential responses to newly imposed United States tariffs that affect major Brazilian exports. Officials described the step as a structured review of options that could, if needed, establish a legal foundation for countermeasures.

The move follows a July decision by the US to apply 25% tariffs on Brazilian sugar, clothing, paper, and steel. US authorities said the measures were based on allegations of unfair trade practices and labor violations, according to the information cited by officials.

Consultations begin under Brazil’s Reciprocity Law

Officials said the mechanism is being activated under Officials said the mechanism is being activated under Brazil’s Reciprocity Law and begins with a stage focused on diplomatic consultations with US trade authorities. They said the priority is to secure a negotiated solution before any trade penalties are introduced by Brazil. If talks fail to resolve the dispute, officials said Brazil could move to countermeasures. They listed possible steps including imposing equivalent tariffs on US products, ending certain import exemptions, or suspending pharmaceutical and agricultural patents. Tariff scope and additional penalties cited by officials Alongside the 25% surcharge, officials also pointed to additional 12.5% penalties tied to labor enforcement. They framed the reciprocity review as a way to protect domestic industries from cost increases linked to the US measures.

In the first half of 2026

Officials also cited trade balance figures showing the US running a surplus with Brazil. In the first half of 2026, officials said the US exported $26.5 billion in goods and services to Brazil and imported $17 billion.

How the US approach is described in the dispute Officials linked the current friction to broader US efforts to address trade deficits through more forceful tariff policies. The information provided said earlier US attempts to introduce universal tariffs were struck down by US courts.

By contrast, the current measures were described as designed to withstand legal challenges. Officials said this legal positioning, if maintained, could shape how much room there is for compromise during the consultation phase initiated by Brazil.

Next steps and timing remain unclear

Officials said it is not yet clear how quickly consultations could deliver a resolution, or which tools Brazil would deploy first if negotiations break down. They said choices on scope and sequencing would depend on how discussions with US trade authorities unfold.

For now, Brazil’s opening of the reciprocity procedure signals a more assertive trade stance as both sides enter consultations, with escalation still possible if no agreement is reached.