Brazil-U.S. Tough Tariff Talks Heat Up

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--U.S. President Donald Trump and Brazil President Luis Inacio Lula da Silva are at loggerheads following Washington's threat of imposing a 50% tariff on all Brazilian imports starting August 1 over the ongoing investigation of former Brazilian president and Trump ally Jair Bolsonaro, along with trade policies.

The Trump administration has announced a number of tariffs on other countries and has singled out tariffs on copper imports.

Lula has since responded through via social media, saying that "any unilateral tariff increases will be addressed in accordance with Brazil's Economic Reciprocity Law."

Following the announcements, Brazil's Ministry of Energy called for a meeting with companies in the energy sector, such as Petrobras (Rio de Janeiro, Brazil), Abicom, BioenergiaBrasil, Raizen and others, to assess the impacts that such tariffs could have on the Brazilian energy sector.

"We are listening to the needs of sectors relevant to the national economy in a scenario that demands attention and responsibility. We will continue to monitor the impacts and work together to develop strategies," said Pietro Mendes, national secretary of oil, natural gas and biofuels at the ministry.

According to the Office of the United States Trade Representative, commerce between both countries stood at US$92 billion last year, with exports of U.S. to Brazil standing at US$49.7 billion and Brazilian exports to the U.S. hitting the US$42.3 billion mark. Both were higher than in the previous year.

The U.S. is Brazil's second-largest economic partner after China, with crude oil exports to the U.S. accounting for 14.4% of the trade, followed by iron and steel with 8.8%, and aircraft and equipment with 6.7%, according to data from Brazil's Ministry of Development, Industry, Commerce and Services.

Bolsonaro is standing trial over an alleged coup and attacks on government buildings in Brasilia following the victory of Lula in the presidential elections. During his time as president, Bolsonaro was a steadfast supporter of Trump.

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