Brazil seeks more time to negotiate as Trump tariffs threaten significant economic damage

Brazil seeks more time to negotiate as Trump tariffs threaten significant economic damage
Brazil’s Vice President Geraldo Alckmin held two meetings with business leaders from the industrial and agricultural sectors. / agencia brasil
By bnl Sao Paulo bureau July 16, 2025

Brazil will pursue a rapid reversal of Washington's 50% tariff announcement while remaining open to requesting additional negotiation time, according to Vice President Geraldo Alckmin.

"If more time is needed, we will work toward that," Alckmin told reporters following discussions with business leaders regarding the levies.

He noted Brazil confronts an "exiguous" deadline since tariffs are due to take effect on August 1.

“From January to June this year, exports from Brazil to the United States increased by 4.37%, while US exports to Brazil rose by 11.48%. With US exports to Brazil now at a record high—almost three times greater than our exports—we will stand united to reverse this decision,” added Alckmin.

The diplomatic crisis intensified after Brasília stated it "deplores and rejects" what it termed "inappropriate statements" from the US concerning former president Jair Bolsonaro's coup trial before the Supreme Court.

Brazil's Foreign Ministry maintained that such demonstrations contradict "200 years of respect and friendship” between the two countries.

The statement criticised the Trump administration's "politicisation" of bilateral trade matters after the US leader threatened Brazilian products with tariffs over what he called a "witch hunt" against Bolsonaro.

President Donald Trump motivated his decision to impose 50% levies also by citing a trade deficit with Brazil, however this is factually incorrect according to official US data.

Trump reiterated backing for the former Brazilian leader, a close ideological ally, this week describing him as a "good man" while claiming the trial represents a "witch hunt" that "no one is happy” about.

"Bolsonaro is not a dishonest man. He loves the Brazilian people. He fought hard for the Brazilian people," Trump told reporters before travelling to Pennsylvania.

He added that "nobody is happy with what Brazil is doing, because Bolsonaro was a respected, very respected” president.

However, three individuals close to Bolsonaro expressed shock at Trump's tariff strategy, fearing it may prove counterproductive, according to Reuters reporting.

The right-wing camp had anticipated targeted sanctions against specific judges rather than broad economic measures that could rally national pride behind President Luiz Inácio Lula da Silva, who was polling at historic lows only recently.

Bolsonaro's inner circle had eagerly sought Trump's support since his White House return. Lawmaker Eduardo Bolsonaro, the former president's son, relocated his family to Washington to lobby for US backing of his father.

Yet the thrill of securing Trump's attention soon curdled as the family realised the crushing weight of tariffs tied to their cause.

The Bolsonaro clan now has "no alternative but to support Trump and his letter, even while understanding that the move could provoke negative reactions," according to one source quoted by Reuters.

Economic analysis from the Getulio Vargas Foundation indicates the tariffs could curb Brazil's GDP by 0.41%, with agribusiness – representing 30% of exports to the US – facing particular vulnerability.

The study suggests food supplies from Brazil to US markets could decline 75%. Products including coffee, sugar, oils and orange juice would be severely affected.

According to Bloomberg, Orange juice futures climbed to four-month peaks in New York following the tariffs announcement amid concerns about reduced Brazilian supply.

FGV legal experts believe Trump's tariffs violate World Trade Organisation rules and have been declared illegal by US courts.

The "climate of insecurity" in international trade generated by the "tariff war" is already damaging bilateral relationships, with the US serving as Brazil's second-largest trading partner.

Meanwhile, Brazilian conservative politicians face a delicate balancing act. São Paulo Governor Tarcísio de Freitas, who launched his political career from Bolsonaro's cabinet, initially blamed Lula's ideology for the tariff hike but later shifted focus to Washington, stating he had met with the US Embassy head to "open a dialogue ... based on data and consolidated arguments," as quoted by Reuters.

Brazilian prosecutors have charged Bolsonaro and seven co-defendants with "coup d'état," "armed criminal organisation," and "attempted violent abolition of the democratic rule of law" over alleged plotting following his 2022 electoral defeat against Lula.

Attorney General Paulo Gonet delivered closing arguments on July 14, arguing the investigation produced "a vast array of evidence," including manuscripts, digital files, and documents revealing "the conspiracy against democratic institutions," as quoted by EFE.

The plot kicked off after Bolsonaro's defeat, with the assault on government branches occurring on January 8, 2023, when thousands of right-wing extremists attempted to encourage military intervention against the new administration inspired by the events of January 6, 2021 in Washington.

Sentences are expected between September and October.

News

Dismiss