Brazil should actually avoid retaliation in the United States, according to experts, as this could generate new Trump actions against the country, detaching a serious commercial war
The government of Luiz Inacio Lula da Silva (PT) evaluates how to react to the new import rate imposed by the direction of Donald Trump in Brazil.
With the measure, all Brazilian exports to the United States will be taxed at 10% from Saturday (5/4).
Brazil was not the only goal: Trump Management has raised rates in various countries, with the controversial promise that this will bring more factories and jobs in their country.
According to foreign trade experts, Brazil has a “powerful weapon” on the table to press for a negotiation: to threaten the United States with retaliation in the intellectual property, such as the breakdown of patents and the suspension of payments paid to US companies.
This possibility has just been authorized by the approval of a new Congress law, expanding the country’s reaction tools to commercial barriers considered unjust.
The idea is that this new legislation allows Brazil to adopt retaliation without the need for prior authorization by the World Commerce Organization (OMC), an almost paralyzed body.
In the case of the United States, the measure of intellectual property could reach the products of the pharmaceutical and cultural sector such as films, for example.
The experts underline, however, that the ideal is that Brazil does not retaliation for the United States, since this could generate new American actions against the country, detaching a serious commercial war.
“The retaliation on intellectual property should be used only as an extra element to strengthen the bargaining power of Brazil in a possible negotiation with the United States,” says the coordinator of the commercial study center of the Getulio Vargas Foundation.
“It is a tool that should be used with great caution, in extreme cases. From a bilateral point of view, I do not see how Brazil returns and I go to Tete-à -tête with the United States. It would be an economic and political suicide “, strengthens.
The threatening strategy of the United States with intellectual property actions would be similar to what Brazil did in 2009, when it was authorized by the World Trade Organization to take revenge on the United States due to the country’s subsidies to the production of cotton.
Brazil was able to demonstrate in the WTO, after years of disputes, which the American subsidy has contradicted the rules of international trade and unjustly damage the exports of Brazilian cotton.
However, although Brazil has received permission to take revenge on the United States, the country has not applied the measures and used this “weapon” to negotiate an agreement with the White House.
“What happened in 2009 is that Brazil was authorized to make the crossed sentence [sobre outros produtos] And there he threatened to take revenge on the intellectual property. This involves many things, from the film to copyright, but what really matters [na relação entre Brasil e EUA]Including the payment of royalties, it is the question of pharmaceutical patents “, also recalls Welber Barral, former secretary of foreign trade in Brazil and today consultant in the area.
“Brazil threatened, the United States negotiated and Brazil has not applied the measure. But it is a powerful weapon as a negotiation tool,” he says.
The United States are the second largest commercial partner in Brazil, behind only China.
In a note after the announcement of Trump, the Brazilian government complained of the measure and recalled that the United States accumulate positive sales in trade with Brazil – $ 43 billion in the sum of the last ten years, according to the Ministry of Development, Industry, Commerce and Services.
The pause, however, retired. Last year, the balance was positive for the Americans of about $ 300 million, with the country of Trump who purchased 40.4 billion dollars in products in Brazil (12% of Brazilian exports) and which sells $ 40.7 billion here (15.5% of imports in Brazil).
The direction of Lula stressed in the note the intention of negotiating with the White House, but cites as possible measures to resort to the World Trade Organization and apply the new law approved to the congress.
“At the same time remains open to the deepening of the dialogue established in recent weeks with the United States government to reverse the announced measures and to contrast its harmful effects as soon as possible, the Brazilian government evaluates all the possibilities of action to guarantee reciprocity in bilateral trade”, says the note.
The 10%rate imposed on Brazilian products was below other countries, which were also targeted by the tricks, such as China (34%), India (26%), Japan (24%) and the European Union (20%).
The justification of the Republican is that these countries charge high import commissions from the United States and should be treated with reciprocity.
“This means that what they do with us, we will like it,” said the Republican.
Despite Trump’s promises, critics of tariff increases claim that the measure will make American production and cause a global commercial war.

Other “weapons” can turn against Brazil
In addition to the retaliation on intellectual property, the law approved at the congress provides for other reaction mechanisms, such as the expansion of import rates or restrictions on the amounts imported from countries that adopt commercial barriers against Brazil.
However, experts explain that it is not interesting for Brazil simply to increase imports against the United States because they would make products that we buy from the Americans, increasing inflation.
In addition, most of what the country acquires from the United States is input used by the Brazilian industry, which would make national production more expensive, reducing its competitiveness.
“Much of the import of the United States comes precisely from inputs to the Brazilian industry. They are pharmaceutical products, parts, parts, equipment. That is, climbing on the rate ends up damaging the Brazilian industry itself. Brazil has difficulty retaliation in retaliation [subindo essas tarifas]”Highlights Welber Barral.
For Lucas Ferraz by FGV, a possible path is Brazil to articulate a reaction with multiple countries.
“Or Brazil is looking for the diplomatic way directly [com os EUA]Or Brazil aligns with other countries to try to increase its bargaining power in a bilateral negotiation with the United States and finally until you feel a little more pressure, “he said, citing Mexico, Canada and the European Union as possible allies.
Before the announcement of the 10% rate imposed on all Brazilian products, the main impact of Trump’s management for Brazil came from the application of a rate of 25% on all American steel and aluminum imports, which have been in force since March 12th.
The measure is important because the products derived from iron and steel are the second most exported Brazilian article for the United States, having added $ 2.8 billion in sales in 2024, right behind oil ($ 5.8 billion).

Brazil, in fact, charges larger rates from the United States?
Foreign trade statistics underline that, in fact, the expenses of Brazil, on average, higher import rates on American products compared to the contrary.
On the other hand, articles with the highest import volume have lower or even zero speeds.
According to the Brazilian government, they enter the country without paying tax products from the United States as aircraft and its parts, gross oil and natural gas.
According to a survey by the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV Ibre) by the data of the World Bank, the simple average rate applied by Brazil to US imports was 11.3% in 2022 (the latest available data).
That is, it has been more than five times the average average rate of the United States on Brazilian imports (2.2%).
When a weighted average is calculated by the volume of imports, the Brazilian rate remains higher, but the difference decreases.
This is because the average rate paid by exporters, in practice, is lower, since the products with a higher import volume on both sides have lower or even zero rates.
Considering this effective rate, Brazil charged 4.7% on average on imports from the United States in 2022, informs the FGV Ibre note from the data of the World Bank.
On the other hand, it states that the document, Brazilian products have undergone an average tax average of 1.3% when it entered the US market.
The Brazilian government, in turn, states that the average tariff charged by the products of Brazil of the United States would be even smaller, 2.7%.
“Overall, it is important to highlight that 74% of US exports to Brazil come without taxation, thanks to various customs lines and rates free from taxes”, argued Itamaraty in a document filed with American public consultancy on the changes to tariff policy before the announcement of the new import rates.
“For example, Brazil applies a zero import fee on US key products, such as oil, aircraft, aircraft, natural gas and coal. The average weighted average rate is only 2.73%, significantly lower than the average nominal rate of 11%of Brazil,” said the document.
A report on the topic published by the Bradesque Economic Department in February estimated what the effect would be if the Trump government decided to combine all the import rates charged by Brazil with the country’s US products, or increase its average rate to 11.3%.
“In this exercise, we find a reduction of approximately 2.0 billion dollars in exports (5% of the total sent),” says the report.
The impact could be reduced in case of new devaluation of reality.
“In a hypothetical exercise, the equivalent amortization of the reality, necessary to compensate for this loss, would be about 1.5%, with an estimated potential impact slightly less than 0.1 percentage points on the IPCA [Ãndice de inflação]As a direct response to the demanding of the currency, “says the bank.
Source: Terra

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