Brazilian government officials have said that Brazil has no intention of entering a trade war with the United States, despite US President Donald Trump imposing a 25 percent tariff on steel. Brazil is the second largest exporter of steel to the United States, after Canada, with a supply of 4.08 million tons of steel in 2024.
Asked about possible tax retaliation, Institutional Relations Minister Alexandre Padilha told reporters, “The government has not discussed this issue, but has opposed the business blockade.” “Brazil does not encourage or enter into any trade war,” Padilha said.
However, this contradicts comments made last month by President Luiz Inacio Lula da Silva, who said he would retaliate if Trump imposed tariff increases on Brazil. “It’s very simple: if he taxes Brazilian products, Brazil will tax products exported from the United States,” Lula, 79, said on the occasion.
Lula said he wanted to improve relations with the United States and increase trade relations with Brazil’s second-largest trading partner after China. Brazilian Finance Minister Fernando Haddad has said that unilateral tariffs like those imposed by Trump are “counterproductive for global economic recovery.”
He said, “This new tax increase does not affect Brazil alone, but rather targets the entire world, and Brazil is watching how other countries react before deciding how to respond to Trump.” US President Trump imposed similar tariff hikes on steel during his first term to protect US producers from unfair competition. However, Brazil was exempted after agreeing to import quotas.
“Brazil is likely to choose diplomacy over retaliation,” Jackson Campos, director of institutional relations at AGL Cargo export company, told AFP. “Negotiating through diplomacy would be an option, because it would have immediate impact. If an agreement cannot be reached, Brazil could try to diversify its markets by looking at India, South Korea and Africa,” Campos said.
The American Chamber of Commerce in Brazil issued a statement saying that it expects a negotiated solution as the tariffs on steel and aluminum have the potential to significantly impact Brazilian exports to these sectors. “In 2024, Brazil exported more than $5.7 billion worth of steel and iron to the United States. In the same year, Brazil exported $267 million worth of aluminum to the US market, equivalent to 16.7 percent of Brazil’s global sales.
The Brazilian Steel Institute said, “The country’s market has also been affected by the significant increase in imports, especially from countries like China, which already compete with the US.” “The institute concluded that there is no possibility that Brazil will block steel products from third countries to the United States as a result of trade protectionist measures,” Trump said.
