MercoPress. South Atlantic News Agency

Lula signs decree regulating Trade Reciprocity Law

The rule will apply to countries or blocs that “interfere with Brazil's legitimate and sovereign choices”

Brazilian President Luiz Inácio Lula da Silva on Monday signed the decree regulating the Trade Reciprocity Law, Chief of Staff Rui Costa confirmed in a statement from the Planalto Palace. The measure is to be published in a regular edition of the Federal Diário Oficial da União (Official Gazette - DOU).

The new rule authorizes the Brazilian government to adopt trade measures against countries that impose unilateral barriers on Brazilian products in the global market. It could be used to respond to the 50% tariff on all Brazilian exports to the United States (US) as of August 1, as announced last week by US President Donald Trump.

According to Rui Costa, the decree does not specifically mention any country and establishes the necessary mechanisms to comply with the law.

“The term 'reciprocity' can also be a quick response if another country takes measures similar to those announced by the United States,” he explained.

Approved in March by the National Congress and enacted in April, the new law is precisely a response to the escalating trade war unleashed by Trump against dozens of countries, Agencia Brasil explained.

In the case of Brazil, the tariff initially imposed by the US was 10% on all products exported to the US market. The exception to this tariff margin is steel and aluminum, for which the surcharge imposed by the US is 25%, significantly affecting Brazilian companies, which are the third-largest exporters of these metals to the US.

The Trade Reciprocity Law establishes criteria for responses to unilateral actions, policies, or practices by a country or economic bloc that “negatively impact Brazilian international competitiveness.”

The rule will apply to countries or blocs that “interfere with Brazil's legitimate and sovereign choices.”

In Article 3 of the text, the Strategic Council of the Foreign Trade Chamber (Camex), linked to the Executive Branch, is authorized to “adopt countermeasures in the form of restrictions on imports of goods and services,” also providing for negotiation measures between the parties before any decision is made.

To discuss how to respond to US tariffs, the government has also set up an interministerial working committee, with participation from the industrial and agribusiness sectors.

The first meetings of the committee will take place on Tuesday, chaired by Vice President Geraldo Alckmin. (Source: Agencia Brasil)