Brazil's Lula pledges retaliation to Trump tariffs but keeps diplomacy open
Beyond imposing counter tariffs, the law would also allow Lula to restrict imports and investments and suspend intellectual property rights from US firms, among other measures.
The US is Brazil's second-largest trading partner after China and has a rare trade surplus with Latin America's largest economy.
Some market sectors, including aviation and banking, felt immediate pressure. Shares of some Brazilian firms declined on Thursday, with plane maker Embraer and major banks such as Itau Unibanco and Banco Santander posting losses.
However, the tariffs could also inflict pain in the US by disrupting food prices, given Brazil's role as a major agricultural exporter of coffee, orange juice, sugar, beef and ethanol. The proposed 50% tariff would effectively halt the flow of Brazilian coffee to the US, its largest buyer, four trade sources told Reuters on Thursday.
Brazilian industry lobby groups representing sectors such as coffee and oil issued statements on Thursday, urging a diplomatic solution.
Josue Gomes da Silva, president of Sao Paulo industry group Fiesp, said: 'We hope diplomacy and balanced negotiations will prevail, despite ideologies and personal preferences, and that common sense will again guide the relationship between these two great sovereign nations.'
Reuters
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