Brazil could partner with U.S. clients to negotiate tariffs

Mr. Braga opposes retaliation and sees room for negotiation, despite the political undercurrents behind the tariff decision announced last week. Because the move was driven by non-economic motives, he also dismisses any meaningful connection between Trump’s actions and Brazil’s membership in the BRICS bloc.

“Obviously, economic reasoning doesn’t explain the tariff hike. From an economic standpoint, the BRICS summit didn’t promote a confrontational agenda. That’s why I see a weak connection when people claim Trump’s action reflects the rise of BRICS,” he said.

Mr. Braga argues that sectors like the U.S. steel industry—which imports semi-finished steel from Brazil as a key input—could be natural allies in lobbying against the 50% tariff. He said the U.S. automotive industry may also have a vested interest in resisting the tariffs, given the potential for rising input costs that could undermine competitiveness.

He criticized what he described as a shift in U.S. trade policy. While in the past the country was an architect of global trade governance, today it is “undermining that very system,” he said, referencing the weakening of the World Trade Organization (WTO)—a trend that accelerated under Mr. Trump but was also seen during the Biden and Obama administrations.

“Mr. Trump simply doesn’t believe in multilateral solutions. Since January, WTO rules, such as the most-favored-nation principle, have been under attack, and he doesn’t care. What will replace this system? The jungle and the law of the strongest. That will undoubtedly generate more tension,” he warned.

Depending on how Trump’s tariff policy evolves toward China and the European Union, Mr. Braga sees potential for mounting domestic opposition and lobbying in the U.S. Congress. “This is also a path for Brazil, working with U.S. industries that depend on Brazilian imports,” he suggested.

Brazil is the second-largest exporter of steel to the U.S. While other countries could theoretically take over the market, Mr. Braga noted that supply disruptions and price hikes would be inevitable in the U.S. “That will reduce the competitiveness of American industry, and I guarantee they are not happy about these tariffs,” he said.

Mr. Braga cautioned that retaliation would be the wrong move for Brazil and could cause more harm than good. While he acknowledged the legitimacy of Brazil’s Economic Reciprocity Law, which allows for countermeasures, he believes it’s not the right strategy for now.

“Retaliation definitely won’t help. It will raise U.S. import costs and increase prices for Brazilian consumers—both people and businesses. We need to stay calm and negotiate,” he urged.

Mr. Braga is also skeptical about any action at the WTO, arguing that although Brazil could win a case on legal grounds, the ruling would have no practical effect.

“Brazil could file a case at the WTO and would certainly win since the tariffs violate WTO rules. But the U.S. would appeal, and with the appellate system paralyzed, the case would remain in limbo without resolution,” he explained.

Although not optimistic about the negotiations, Mr. Braga noted there are areas where the U.S. remains interested in fostering positive relations with Brazil, citing the Alcântara space base partnership as one example.

While he expects some economic impact from the 50% tariffs, Mr. Braga dismissed fears of a broader crisis. “Exports to the U.S. represent about 2% of Brazil’s GDP. It’s not a disaster, the world isn’t ending, but there will definitely be consequences, especially for the most affected companies,” he said.

Mr. Braga highlighted that the greater concern for Brazil’s trade balance lies in the fact that exports to the U.S. are more heavily weighted toward manufactured goods. For agricultural products and commodities, Brazil can redirect exports to other markets.