Brazil’s President, Luiz Inácio Lula da Silva, issued a warning Thursday about potential retaliatory tariffs if the U.S. proceeds with its planned 50% tax on Brazilian imports from Aug. 1.
What Happened: Lula stated via his official X handle that Brazil would take the necessary measures to “protect its people and its companies.”
“The Brazilian people must be respected. Brazilian justice must be respected.” Lula said, “We are a great, sovereign country with a historic tradition of diplomacy with all nations.”
“And don’t have any doubt that first we will try to negotiate, but if there is no negotiation, the law of reciprocity will be put into practice,” the Brazilian president stated in an interview with local media. “If he’s [Trump] going to charge us
50, we’re going to charge him 50.”
See Also: Ray Dalio Says Trump’s Tariffs Are ‘Theoretical,’ Warns They May Not Bring Manufacturing Back To US
Meanwhile, Brazil’s Finance Minister, Fernando Haddad, is trying to defuse the growing tensions. He expressed confidence that any dispute “can and must be overcome through diplomacy,” Reuters reported.
Why It Matters: This development follows a flare-up in tensions between the U.S. and Brazil after President Donald Trump sent a letter to Lula, threatening to impose 50% tariffs on Brazilian imports.
Trump accused Brazil of “insidious attacks on free elections” and dubbed the trial of former President Jair Bolsonaro a “witch hunt.”
The proposed tariffs have begun to impact the Brazilian economy, with shares of Brazilian aircraft manufacturer Embraer S.A. ERJ plunging in Thursday’s regular trading. As the world’s third-largest aircraft maker, Embraer heavily relies on the U.S. market, making it particularly vulnerable to these proposed trade measures.
Price Action: Shares of iShares MSCI Brazil ETF EWZ closed 1.56% lower at $27.72 on Thursday, while Embraer slid 4.65%.
The Embraer stock demonstrated a very high momentum score as of this writing. Use Benzinga Edge Stock Rankings. to see how it compares to Boeing Co. BA.
Photo Courtesy: Marcus Mendes on Shutterstock.com
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