Lula and Trump spoke by phone last Friday (21st), in a call lasting 1 hour and 20 minutes described as friendly in tone. Following the leaders' conversation, U.S. Trade Representative Jamieson Greer reached out directly to Brazil's Minister of Development, Industry, Trade and Services, Márcio Elias Rosa, to schedule a technical videoconference meeting between the two countries' teams. According to people close to the government, the internal assessment is that the reciprocity process is not expected to move forward this year, with priority given to the negotiated path — reinforcing the view that formal retaliation, if it comes, is still a distant prospect.

Background: the reciprocity process

In the weeks prior, the Brazilian government had already begun the formal process to evaluate whether it will invoke the Economic Reciprocity Law (Law No. 15,122/2025) against the United States, in response to the tariffs imposed by Donald Trump on Brazilian products. The analysis is being handled by the Chamber of Foreign Trade (Camex), while Brazil's foreign ministry, Itamaraty, notified the U.S. government and requested the opening of diplomatic consultations. The question left for businesses and consumers is a single one: will this weigh on household budgets, and when?

Tax attorney Bruno Medeiros Durão, president of the law firm Durão, Almeida e Pontes - Advogados Associados, highlighted two points:

"It's important to separate two things: starting the procedure set out in the Reciprocity Law doesn't mean Brazil has already applied retaliation. At this moment, there is a formal analysis of which measures could be adopted and what their impacts would be. The legislation itself establishes proportionality criteria, precisely to avoid a trade response causing even greater damage to the Brazilian economy."

The U.S. tariffs of 25%, combined with an additional 12.5% applied to some products, hit a significant share of Brazil's export basket, estimated at around $11 billion by Amcham Brazil. The most exposed sectors are machinery, footwear, furniture, and textiles, along with beef, which could see a sharp drop in sales to the American market. The furniture industry, for example, has already cut the U.S. share of its exports in half over the past two years.

On the macroeconomic side, market estimates indicate the tariffs' impact on Brazil's GDP should range between 0.3 and 0.6 percentage points in 2026 — a real but not catastrophic effect. Experts note that heavyweight products such as coffee, oil, and civil aircraft were left out of the tariffs, limiting the damage to bilateral trade overall. According to a researcher at Ibre/FGV, it's unlikely the tariffs will significantly alter the country's aggregate trade balance, since the U.S. accounts for an increasingly smaller share of Brazilian exports.

What it means for consumers

If Brazil does decide to apply countermeasures under the Reciprocity Law, the side effect could show up on the import side: products such as medicines, machinery, and fuel coming from the U.S. would become more expensive, directly impacting businesses and, in turn, the end consumer. A 25% tariff increase in the U.S. doesn't mean prices at Brazilian supermarkets will rise by the same proportion — the charge is levied at the point of entry into the American market and hits exporting companies first. For the Brazilian consumer, the effect tends to be indirect and comes mainly through two channels: pressure on the exchange rate and production costs for domestic industry.

A prolonged trade dispute tends to increase financial market instability and pressure the dollar's exchange rate. With a more expensive dollar, imported inputs and raw materials cost more for Brazilian industry, which can be reflected in consumer prices, albeit gradually rather than immediately.

"The biggest risk for consumers isn't necessarily a single tariff, but an escalation of retaliatory measures. The longer the dispute drags on, the greater the uncertainty tends to be for companies that depend on foreign trade, which can affect investment, production costs, and price formation."

There's also an effect in the opposite direction, which could actually ease the burden in the short term: some of the production that would no longer be exported to the U.S. tends to stay in the domestic market, increasing the supply of certain products and pushing prices down. Planning Minister Wellington Dias himself has already acknowledged that the drop in exports could bring some short-term relief to food prices, but warned that the medium- and long-term outlook tends to be more challenging, with possible declines in production, less investment, and effects on employment.

"The effect arrives through other channels. If Brazil adopts countermeasures on American products — medicines, machinery, fuel, or other inputs, for instance — those could see cost increases, depending on which products are chosen. That price increase can be passed along the chain by companies and reach the final price,"

In other words: the impact on Brazilians' wallets shouldn't be immediate or widespread. It depends on three factors that remain open: whether Brazil actually applies countermeasures under the Reciprocity Law, how the market reacts in terms of exchange rate, and whether the trade dispute drags on or gets resolved diplomatically — a path that gained momentum after the Lula-Trump call and which the Brazilian government itself has signaled it prefers.

"It's still too early to say the tariffs will cause a widespread rise in prices in Brazil. The impact will be uneven and will depend on whatever measures are eventually adopted, which products are affected, and how the exchange rate reacts. Consumers should watch not just the tariffs announced by the United States, but especially which countermeasures Brazil decides to put into practice — and now, also the progress of direct negotiations between the two governments,"