Brazil will seek negotiated deal if U.S. imposes 25% tariff, trade minister says

In the meantime, Brazil is continuing to negotiate. On Wednesday (1), it formally submitted its written brief to the Office of the U.S. Trade Representative. The government’s strategy is to show just how much damage the tariffs would do to the U.S. economy itself.

Rosa said Brazil’s Economic Reciprocity Law—passed last year by Congress to allow countermeasures against unilateral action by other countries—remains “an asset kept in reserve.” As he put it: “You can’t even think about that before July 15, because there’s no basis for applying it yet.”

He also said the federal government could expand the Brasil Soberano program to support sectors hit by the new U.S. measure, if needed. “Seafood, ornamental stone, timber, textiles and footwear—those are the most exposed sectors,” he said.

According to Datamar’s maritime cargo throughput data, footwear exports to the United States fell 25.7% in the first five months of the year compared with the same period a year earlier. That means only 466 TEUs were shipped to the North American market. See more details below:

Footwear Exports to the United States | Jan 2023 – May 2026 | TEUs

Source: DataLiner (click here to request a demo)

Section 301 is a U.S. trade law provision used to investigate practices considered harmful to American commercial interests. While trying to keep the talks from becoming politicized, Brazil has responded on technical grounds to U.S. concerns about Pix, corruption, and piracy, among other issues.

Rosa declined to share details of Brazil’s proposal, saying it could create unnecessary noise, but said he expects to speak again with his U.S. counterpart in the coming days.

The negotiations between the two countries’ technical teams are running alongside the formal Section 301 process. They began after President Luiz Inácio Lula da Silva met with President Donald Trump at the White House, and later expanded to cover issues raised by the USTR’s Section 301 recommendation.

“One of the accusations against Brazil is that, on top of keeping tariffs very high, we have two preferential trade deals—with India and Mexico—that hurt the United States. So we need to show, using our own trade numbers, that Brazil is willing to give the U.S. the same treatment it gives Mexico or India,” the minister said.

Rosa also played down the significance of the USTR’s decision to let Senator Flávio Bolsonaro(Liberal Party, PL, Rio de Janeiro), a presidential candidate, speak Thursday (3) at the public hearing in Washington on the proposed tariff. He said the move carries no ideological weight: “One person showing up in person, a senator—it doesn’t carry any real weight or relevance. He’ll likely get three to five minutes, depending on how many people register to speak. Him being there doesn’t mean much.” Excerpts from the interview below:

The legal deadline for the Section 301 investigation is July 15. Where do things stand with the U.S.?

Marcos Rosa: Today [Wednesday, July 1] matters because it’s when our Foreign Ministry formally submits Brazil’s written brief to the USTR responding to their recommendations. It largely restates what Brazil has already presented—this is our formal defense in the Section 301 case. Separately, our technical teams are negotiating in parallel. That track does touch on Section 301 issues, but it actually started after President Lula’s visit to the White House, and it’s still ongoing.

Will there be more meetings?

Rosa: We’ve already had several. I met with [USTR] Jamieson Greer two weeks ago. We had two technical meetings last week, and another on Monday this week. We expect to talk again soon—I’ve been in touch with Greer directly, sometimes even over WhatsApp.

Does the government see room for a deal before the deadline?

Rosa: July 15 is when the U.S. has to decide: Impose the tariff, suspend it, or announce that a deal has been reached. My view is that we need to keep the conversation technical. We’re pushing to keep non-commercial, non-technical issues—ideological ones—off the table, because this investigation didn’t start over economics or trade. Remember how it began: the executive order, the 50% tariff, the claims about interference in the Supreme Court. We can’t let those issues back into the negotiation.

You’ve reportedly proposed lowering tariffs on U.S. machinery and equipment. What else is on the table?

Rosa: I can’t get into the details. We’re looking at tariff lines that matter to the U.S. and also serve Brazil’s interests, since we want to grow the trade relationship—items from both their export list and ours. One of the accusations against Brazil is that, on top of keeping tariffs very high, we have two preferential trade deals—with India and Mexico—that hurt the United States. So we need to show, using our own trade numbers, that Brazil is willing to give the U.S. the same treatment it gives Mexico or India That extends to cooperation on crime and piracy too—President Lula has already offered to work with the U.S. on that front.

Has Washington responded to any of Brazil’s proposals?

Rosa: We’ve put several proposals forward and haven’t gotten a response yet, but the dialogue continues. The claim that Brazil favors India and Mexico through our trade deals just isn’t accurate—and beyond the rhetoric, the numbers back that up: the U.S. runs a solid trade surplus with Brazil. The balance actually favors them, not us. The talks have been constructive and the tone positive, but we don’t have concrete results yet. We keep negotiating.

Rosa: Our goal is to get the tariffs eliminated or suspended, whether or not we reach an agreement first. But say the tariff does go into effect—then we’d negotiate it down from 25% to something lower, plus exemptions for sensitive sectors. These paths aren’t mutually exclusive; we’re working all of them at once, which is part of why we can’t lay out the full proposal publicly. Ultimately, we want an agreement that brings the tariff to zero. That’s the goal.

Could Brazil invoke the Economic Reciprocity Law against the U.S.?

Rosa: It’s an asset we’re holding in reserve if we need it. But there’s no case for it before July 15—you can’t even think about that before July 15, because there’s no basis for applying it yet. The law only applies once a bilateral action has actually happened, and that hasn’t occurred.

What about using it against the European Union? They’ve recently restricted Brazilian steel, and there’s also the beef issue.

Rosa: With the EU, we’re in a different phase—starting a new, broader relationship and focused on implementing the agreement we already have. That’s where our energy needs to go right now.

Which sensitive sectors are you most worried about if the U.S. tariff goes through?

Rosa: Seafood, ornamental stone, timber, textiles and footwear. Those are the most exposed.

Is there already a contingency plan if new tariffs hit? Could Brasil Soberano be expanded?

Rosa: That depends on the scope of the tariffs. Expansion is possible, but it hinges on three things: what the U.S. decides, which sectors get hit, and whether we can act after July 4, given electoral restrictions. I think keeping the current program running is realistic; launching a brand-new one may not be.

And what about expanding the existing one?