‘If he charges 50%, we will charge 50%': Brazil vows retaliatory action if negotiations fail; what is the reciprocity law?

Brazilian President Luiz Inácio Lula da Silva has responded to US President Donald Trump’s Wednesday announcement on his plans to implement a 50% tariff on Brazilian imports.Trump's letter addressed to President Luiz Inácio Lula da Silva stated the tariffs would commence on August 1, in a bid to provide "Level Playing Field” while lashing out at the current Brazilian government for unjust criminal trial against their former President Jair Bolsonaro.

Lula said he will be forced to trigger Brazil's economic reciprocity law, approved by Congress, if the US fails to negotiate. He said, “If there’s no negotiation, the reciprocity law will be put to work. If he charges 50 (% tariffs) from us, we will charge 50 from them,” reported AP, citing Brazilian media outlets. What is Brazil’s Economic Reciprocity Law?Signed by President Luiz Inácio Lula da Silva on April 14 this year, Brazil’s “Economic Reciprocity Law,” allows Brazil to suspend trade, investment, and intellectual property concessions in response to unilateral measures by other countries or blocs that harm its competitiveness.

The law is a strategic response by Brazil to address tariffs introduced by the Trump administration against multiple countries.Lula posted in a tweet on X, “The Brazilian people must be respected. Brazilian justice must be respected. We are a great, sovereign country with a historic tradition of diplomacy with all nations. Brazil will adopt the necessary measures to protect its people and its companies.”

Trump publicly opposed the criminal proceedings against Bolsonaro on Monday as well, concerning the former president's attempts to retain power following his defeat in Brazil's 2022 election. Lula responded decisively, telling reporters on Monday, "I think it's very wrong and very irresponsible for a president to be threatening others on social media. People have to learn that respect is a good thing." He further remarked about Trump, "He needs to know that the world has changed.

We don't want an emperor."Lula's remarks heighten the risk of a potential tariff war between the two nations, with Trump pledging a strong retaliatory response to any punitive tariffs imposed on the US.