Brazil Analyzes Commercial Reciprocity After US Tariff

The Minister of Finance, Dario Durigan, said this Friday (14) that he will listen to Brazilian and foreign businesspeople about the possible impacts of applying Brazil's Reciprocity Law, in response to tariffs imposed by the United States. The initiative led to a 37.5% increase in taxes on some products. The Brazilian government's decision on the formal adoption of proportional countermeasures to preserve Brazil's commercial competitiveness will come after this analysis.

"The process of reciprocity in a serious country, and one that wants to hear those affected by reciprocity, demands a hearing from potential interested parties and those potentially impacted by a measure that may or may not be adopted in the future", pointed out the Minister of Finance. This Thursday (13), the Brazilian government officially opened the process for the application of commercial reciprocity measures. In an interview with the press, the head of the Finance department recalled that the legal measure was unanimously approved last year in the National Congress, but that caution is needed. "[The government] is always very cautious and very responsible in handling it."

Donald Trump's government alleges unfair trade practices that harm the North American market, in addition to the alleged existence of forced labor, to justify the surcharge on part of Brazilian exports.

What the Law of Reciprocity says Law No. 15,122 establishes criteria for suspending commercial concessions in response to unilateral actions, policies or practices of another country that negatively impact Brazil's economic competitiveness. In other words, if a country with which Brazil has a trade relationship adopts a measure that harms it in this relationship, the government can adopt a series of countermeasures. These include imposing taxes or fees, ending exemptions or reducing the value of import tariffs, or restricting imports of goods or services. These countermeasures must be, as far as possible, applied in the same proportion as the economic damage caused by another country or economic bloc to Brazil.