U.S.-Brazil Trade Tensions Rise as Trump Imposes Steep Tariffs on Steel and Aluminum

The governments of Brazil and the United States are set to meet this Friday (14) in Brasília to discuss the newly imposed 25% tariffs on steel and aluminum imports by President Donald Trump. Representing Brazil in the high-stakes negotiations will be officials from Vice President and Minister of Development, Industry, Trade, and Services, Geraldo Alckmin’s office—though Alckmin himself will not be in attendance.

The decision to impose tariffs, which took effect overnight between Tuesday (11) and Wednesday (12), was met with strong resistance from Brazil. The Brazilian government swiftly condemned the move as "unjustifiable and mistaken," announcing plans to challenge the decision through the World Trade Organization (WTO). In parallel, Brazilian authorities have vowed to work alongside the private sector to protect national interests.

Brazil’s Response: Dialogue Over Retaliation

Brazil, the second-largest supplier of iron and steel to the U.S. after Canada, exported $4.677 billion worth of these products to the American market in 2024 alone. Given the significance of this trade relationship, Brazilian officials are advocating for a strategic and measured response rather than immediate retaliation.

Minister of the Civil House, Rui Costa, stated that President Luiz Inácio Lula da Silva (PT) will decide on the course of action following Friday’s meeting. The Brazilian government has made it clear that negotiation remains the priority. Finance Minister Fernando Haddad reaffirmed that there will be no immediate countermeasures, instead emphasizing the principle of reciprocity as the guiding philosophy in trade relations with the U.S.

Vice President Alckmin echoed this sentiment, stressing the importance of diplomacy. “We believe that the path is not ‘an eye for an eye.’ If we follow that logic, everyone ends up blind. The key in international trade is a win-win approach,” he said.

Earlier this month, Alckmin described his conversation with U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer as "positive." The discussions, according to Brazilian officials, could pave the way for an amicable resolution.

As a direct response to the escalating trade dispute, Brazil and the United States have formed a special working group aimed at addressing tariff-related conflicts, the Itamaraty (Brazilian Ministry of Foreign Affairs) confirmed.

Industry Backlash and Economic Impact

The Brazilian private sector has also weighed in on the controversy, emphasizing the need for negotiation. The Brazilian Steel Institute (Aço Brasil) remains hopeful that diplomatic efforts will succeed, pointing to a similar situation in 2018 when Trump’s first administration imposed—and later eased—restrictions on steel imports.

Meanwhile, the National Confederation of Industry (CNI) criticized the U.S. decision, calling it a “severe misjudgment” of the long-standing trade relationship between the two nations. The group expressed concerns that such protectionist measures could damage economic cooperation between Brazil and the U.S.

Trump, for his part, appears unfazed by the backlash, claiming that any disruptions caused by his tariffs will be short-lived. However, economists warn that his aggressive trade policy risks destabilizing global supply chains and inflating domestic prices in the U.S.

For Brazil, the direct economic impact of the steel and aluminum tariffs is projected to be limited. A recent study by the Institute for Applied Economic Research (Ipea) estimated that Brazil’s GDP could take a slight 0.01% hit due to the tariff implementation.

Global Trade Shifts: China Looks Elsewhere for Imports

Amidst rising protectionism from the U.S., other global players are adjusting their trade strategies. China, the world’s largest commodity importer, has announced plans to increase its food imports from Latin America and Europe, diversifying its supply chains as geopolitical tensions persist.

This shift could present an opportunity for Brazil and other Latin American nations to strengthen economic ties with China, particularly in the agricultural and commodities sectors.

What’s Next?

As trade tensions simmer, all eyes are on the outcome of Friday’s meeting in Brasília. Will Brazil’s diplomatic approach lead to a compromise, or will Trump’s hardline stance persist? The stakes are high, and the outcome could reshape economic relations between two of the world’s largest economies.