Brasília Rejects Washington's 25% Levy as Lula Reaches for the Reciprocity Law
The first strike under Trump's new Section 301 strategy lands days before Brazil's election season, and Lula's government calls it a 'lamentable milestone'
The United States will impose a 25 percent tariff on certain Brazilian imports from July 22, in the first use of President Donald Trump’s new trade strategy under Section 301 of the Trade Act of 1974 — a move Brasília has flatly rejected as unjustified.
The decision follows a year-long investigation by the Office of the US Trade Representative (USTR), which concluded that a number of Brazilian policies place an unreasonable burden on American commerce. The probe examined Brazil’s approach to digital trade, tariffs, intellectual property protections, market access for US ethanol, anti-corruption enforcement, and environmental policy relating to deforestation.
US Trade Representative Jamieson Greer said the measure was needed to protect American businesses and workers after negotiations failed to resolve Washington’s concerns, describing it as necessary to ensure US workers and companies could compete on a level playing field. Despite extensive talks over the past year, he said, the two sides had reached no agreement — though Washington remained open to further negotiation.
Secretary of State Marco Rubio was blunter, accusing the Brazilian government of failing to negotiate in good faith and saying President Luiz Inácio Lula da Silva had put his own ego ahead of a deal for the welfare of the Brazilian people.
‘There is no justification’
Lula’s government repudiated the decision outright, rejecting the USTR’s findings and denying that Brazil engages in unfair trade practices. In a statement, the presidency said it repudiated the US decision and that there was no justification for unilateral measures against the country, language Brazilian officials cast as a lamentable milestone in bilateral relations and a violation of multilateral trade rules.
Brasília also disputed the economic premise. It noted that 76 percent of imports from the United States entered Brazil duty-free in 2025, that the average tariff effectively applied to US products was just 3.1 percent, and that Washington has run a substantial trade surplus with Brazil over recent years — a surplus Lula has previously put at more than $400 billion across the past 15 years.
Brazil said it would immediately begin the procedures needed to invoke its Reciprocity Law, passed unanimously by the National Congress, and would pursue the matter through the World Trade Organisation’s dispute settlement mechanism. It added that it does not recognise the legitimacy of investigations conducted outside multilateral rules.
Though the tariffs will apply to thousands of Brazilian products, Washington has exempted several key goods either not produced domestically or considered critical to supply chains — among them coffee, beef, oranges and orange juice, certain oil and gas products, and aerospace components.
Trade war with an election backdrop
The dispute carries an unmistakable political charge. After the tariffs were first proposed in June, Lula suggested the move was politically motivated, accusing Senator Flávio Bolsonaro — son of former president Jair Bolsonaro and a Trump ally — of lobbying US officials against his administration ahead of Brazil’s October elections. Lula has since described the measure as the product of active collaboration with the Bolsonaro family.
The levy also follows an earlier confrontation in which Trump imposed a 50 percent tariff on Brazilian goods under the International Emergency Economic Powers Act (IEEPA), citing Brazil’s prosecution of Jair Bolsonaro over his attempt to overturn his 2022 election defeat. The Supreme Court struck down most of those tariffs earlier this year, ruling that the president had exceeded his authority under that law.
The new Section 301 framework replaces it with one grounded in alleged unfair trade practices — potentially giving the administration firmer legal ground to sustain trade restrictions while talks continue. Analysts note the irony that the pressure may work in Lula’s favour: he has rallied public opinion behind him under previous US trade threats, and faces Flávio Bolsonaro at the polls in October.
Reference: Al-Mayadeen