Brazil "Will Not Enter Into Any Trade War" With US

Brazil has no intention of entering a trade war with the United States, a government minister said Tuesday after US President Donald Trump imposed a 25-percent levy on steel.

Brazil is the second-largest exporter of steel to the United States after Canada, providing 4.08 million tonnes of the metal in 2024.

Asked about potential retaliation to the tariffs, institutional relations minister Alexandre Padilha told journalists "the government has not discussed this at all," but was opposed to a commercial standoff.

"Brazil does not encourage and will not enter into any trade war," said Padilha.

However, this stands in contrast to comments made by President Luiz Inacio Lula da Silva last month, vowing reciprocation if Trump hit Brazil with tariffs.

"It's very simple: if he taxes Brazilian products, Brazil will reciprocate in taxing products that are exported from the United States," said the 79-year-old Lula.

Lula said he would prefer to "improve our relationship with the United States" and boost trade ties with Brazil's second-largest trading partner after China.

Brazil's Finance Minister Fernando Haddad said unilateral tariffs like those imposed by Trump are "counterproductive for improving the global economy."

But he said this new tariff does not single out Brazil, instead targeting the whole world, and that Brazil is waiting to see how other countries react before deciding how to respond to Trump.

Trump imposed similar steel tariffs during his first term of office to protect US producers faced with what he complained to be unfair competition.

However, Brazil was exempted after agreeing to import quotas.

Jackson Campos, director of institutional relations at AGL Cargo export company, told AFP that Brazil was likely to opt for diplomacy over retaliation.

"Negotiating through diplomacy will be one of the options, because that has the most immediate effect," he said.

He said if an agreement could not be made, Brazil could try and diversify the market by looking towards India, South Korea and Africa.

The American Chamber of Commerce in Brazil said in a statement that it hopes for a "negotiated solution" as the tariffs to be applied on steel and aluminum have "the potential to significantly affect Brazilian exports in these sectors."

"In 2024, Brazil exported more than $5.7 billion in steel and iron to the United States, the main destination for Brazilian exports. In the same year, Brazil exported $267 million in aluminum to the American market, equivalent to 16.7 percent of Brazil's global sales," it said.

The Brazilian Steel Institute said the country's market "has also been hit by a significant increase in imports from countries that practice predatory competition, especially China."

The institute said that as a result of trade defense measures, there was "no possibility of Brazil circumventing steel products from third countries to the United States," as alleged by Trump.

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