US Commerce Secretary Howard Lutnick has identified Brazil among multiple countries needing commercial relationships "fixed" to benefit the US, despite Washington running a trade surplus with Latin America's largest economy.

Speaking to NewsNation over the weekend, Lutnick singled out Brazil, Switzerland, India and Taiwan among governments from which the US expects concessions.

"These are countries that need to react appropriately to the US, open their markets, and stop taking actions that harm the US," he stated.

The secretary declared that tariffs imposed by President Donald Trump will remain until these nations liberalise markets and recognise that "if they want to sell to American consumers, they need to negotiate with the president of the US."

Lutnick's assertions contradict US official trade data showing that Washington consistently holds advantages with Brazil. The US recorded a BRL152.8bn ($28.6bn) surplus in goods and services trade with Brazil during 2024, a positive balance for the Trump administration.

The first half of 2025 registered an additional $1.67bn US surplus.

"A small country like Switzerland has a $40bn trade deficit with the US. They say, 'Well, it's a small, rich country.' You know why they're a small, rich country? Because they sell us $40bn more in goods," Lutnick said.

Brazil remains excluded from Washington's latest tariff round targeting pharmaceuticals, heavy lorries, furniture and household goods from Ireland, Switzerland, Australia, South Korea, the UK, India, Mexico, Germany, China, Japan and other nations with penalties ranging from 25% to 100% effective October 1.

Political motivations and tariff timeline

Trump's tariff offensive commenced early in his second term, with announcements between July 7-12 hitting over 50 countries, including Brazil, with the Republican president arguing the measures would start reversing trade imbalances that have been "extremely deficient for the US for decades."

Brazil was slapped with 40% additional duties on top of the existing 10% baseline levies, totalling 50% tariffs. Trump acknowledged the political motivation behind such steep tariffs, branding Supreme Court proceedings against former president Jair Bolsonaro over coup attempt charges as a "witch hunt" – effectively punishing Brazil for judicial actions against a close ideological ally.

The July 30 decree cited "recent Brazilian policies, practices, and actions that threaten the national security, foreign policy, and economy of the US."

Tariffs kicked in on August 6, with 694 exemptions sparing orange juice, pulp and Embraer aircraft whilst affecting meat, coffee, machinery and fish.

Economic impact projections varied – UBS BB forecast maximum 0.6 percentage point GDP effects while Goldman Sachs estimated 0.25 points, assuming 74% of Brazilian exports to the US could redirect to alternative markets.

Yet small- and medium-sized enterprises (SMEs) manufacturing specific US-market products faced more severe disruption than Brazil's relatively closed economy overall.

Brazilian countermeasures and diplomatic positioning

In a bid to cushion the impact, President Luiz Inácio Lula da Silva's administration hit back with the "Sovereign Brazil" programme announced on August 13, featuring a BRL30bn ($5.65bn) reduced-interest credit facility as well as expanded export insurance, tax deferrals, and purchases of perishable goods originally destined for US markets.

The president of Brazil’s development bank BNDES, Aloizio Mercadante, confirmed the institutional prioritisation of affected companies, according to a report by Estadao.

“Brazil is experiencing a very strong economic moment and is attracting a lot of investment. They (international investors) are interested in Brazil's success," Mercadante stated in a TV interview, as quoted by Estadão.

An additional BRL5bn from international partnerships will be announced shortly for companies requiring credit access, according to Mercadante.

"We were just stowaways on the ship. The US' problem is bigger with China. We shouldn't be treated this way. It's completely irrational from a commercial standpoint, but we'll have to overcome it," Mercadante added.

Diplomatically, Lula adopted measured confrontation, declaring tariffs "would not go unpunished" and that Trump and Americans "would suffer the consequences." He declined telephone discussions with Trump regarding the tariffs, instead extending an invitation to the upcoming COP30 climate summit in Belem.

Thawing tensions?

Last week's Trump-Lula interaction during the UN General Assembly in New York may signal a potential détente after the US leader described "excellent chemistry" with his Brazilian counterpart. Both leaders reportedly agreed to a bilateral meeting in the coming weeks, which diplomats say is in the works.

"I only do business with people I like, and I liked him," Trump said of Lula.