Brazil activates its Economic Reciprocity Law for the first time, opening a formal Camex procedure that could lead to countermeasures against 25 percent US tariffs even as Brasilia insists the door to negotiation remains open.
BRASILIA, August 16, 2026 Brazil set in motion the most consequential trade defense mechanism in its modern history on Thursday, August 13, when the executive secretariat of the Chamber of Foreign Trade, known as Camex, circulated to the other members of its executive management committee a formal request to open a reciprocity procedure against the United States. The step, confirmed in a statement from the presidential palace and reported on August 14 by Datamar News, UPI, the Rio Times and the Reuters wire, marks the first time Brazil has ever activated Law 15.122/2025, the Economic Reciprocity Law that President Luiz Inacio Lula da Silva signed in April 2025 as tariff tensions with Washington were gathering force.
The procedure is Brasilia’s institutional answer to a 25 percent US tariff that took effect on July 22 across a broad list of Brazilian exports, including sugar, apparel, paper, steel, and agricultural and electrical machinery, and to a separate 12.5 percent duty tied to allegations that Brazil has failed to prevent goods made with forced labor from entering trade. Stacked together, the two measures can push the border tax on non-exempt Brazilian goods to 37.5 percent, a level that exporters describe as commercially prohibitive for thin-margin commodities and manufactured inputs alike.
For all the political weight of the announcement, no countermeasure is in effect. What Brazil has opened is a technical review, a mapping exercise that the Rio Times reported is expected to take roughly 30 days, during which Camex and an interministerial committee will assess which industries have been hit, quantify the damage, and determine whether the US measures fall within the scope of the law. In parallel, the foreign ministry, Itamaraty, will notify Washington and request direct diplomatic consultations. UPI, citing Agencia Brasil, reported that the notification opens a 60 day window for bilateral negotiations before any countermeasure would be adopted.
The Brazilian government has left little doubt about how it views the US measures. In a statement carried by Al Jazeera and Reuters on August 14, the government called the tariffs “unjustified and arbitrary” and said Brazil will “continue to defend its position in all appropriate forums.” At the same time, the presidential palace framed the procedure as an instrument of dialogue rather than escalation. “The diplomatic consultations, aimed at mitigating or neutralizing the effects of the measures and countermeasures provided for under the Economic Reciprocity Law, reinforce the Brazilian government’s willingness to prioritize dialogue and negotiation in its international relations,” the government said in the statement quoted by Datamar News.
A Law Written for This Moment
The Economic Reciprocity Law is a young statute with an unusually direct legislative pedigree. Congress approved it in April 2025 by a broad majority, in what Datamar News, drawing on reporting by BBC News Brasil, described as a rare alignment between government and opposition lawmakers who had seldom voted together in recent years. The urgency was not abstract. The bill moved through Congress as Washington was preparing sweeping unilateral tariffs on Brazilian products, and the law was designed, in the words of its own text, to set out the criteria for suspending trade concessions, investment concessions and obligations related to intellectual property rights in response to unilateral measures that negatively affect Brazil’s international competitiveness.
The law can be invoked in three circumstances, according to the summary published by Datamar News. The first is when a country or economic bloc unilaterally threatens or imposes trade, financial or investment barriers with the aim of interfering in Brazil’s sovereign decisions. The second is when a partner violates the terms of a trade agreement with Brazil in a way that harms the country or its companies. The third applies when a trading partner restricts Brazilian products on the basis of environmental requirements that are stricter than Brazilian law, are unilateral and are not grounded in multilateral agreements.
The toolkit the law and its implementing decree provide is deliberately wide. The primary instrument is the imposition of additional tariffs or surcharges on goods and services imported from the country that initiated the dispute. A second mechanism allows Brazil to suspend compliance with terms of trade agreements with the offending party, which could affect previously agreed import or export quotas. The third, and the one that has drawn the most attention from multinational companies, is the suspension of certain intellectual property obligations. Reuters has reported, citing sources familiar with the government’s deliberations, that options under study include the possible suspension of pharmaceutical and agricultural patents held by US companies, a measure that would ripple far beyond the tariff schedule and into the licensing and royalty structures of some of the largest American firms operating in Brazil.
Crucially, the law is not a blank check for retaliation. Its drafters embedded a proportionality principle: countermeasures should, whenever possible, be proportional to the economic damage caused to Brazil, and the statute instructs the government to minimize the impact on economic activity and avoid administrative burdens and costs, as Datamar News noted. That language reflects a concern shared by the government and Congress that tariffs on imported inputs could injure Brazilian production chains that depend on those very goods.
From a 50 Percent Shock to a Supreme Court Reversal
The August 13 procedure is best understood as the latest chapter in a tariff saga that has run for more than a year. On August 6, 2025, the United States imposed a 50 percent tariff on a wide range of Brazilian goods, prompting Brazil to accelerate the regulatory groundwork for the Reciprocity Law. That tariff, however, did not survive judicial scrutiny in the United States. On February 20, 2026, the US Supreme Court struck it down, removing the 50 percent surcharge and briefly raising hopes in Brasilia that the dispute might subside.
It did not. On July 15, 2026, the Office of the US Trade Representative announced the conclusion of an investigation into Brazilian trade practices it considered unfair and unveiled the 25 percent tariff, which took effect on July 22. Trade lawyers and Brazilian officials widely regard the new round as a replacement for the invalidated 2025 measure, reconstructed on a different legal footing. According to Datamar News, Washington justified the action by citing a list of grievances that ranged well beyond conventional trade complaints, including alleged favoritism toward Pix, Brazil’s instant payment system, unfair trade practices, shortcomings in fighting corruption and deforestation, and differences over intellectual property law. US Trade Representative Jamieson Greer said the measure was necessary “to address unfair trade practices and ensure that American workers and companies can compete on fair terms,” adding that a year of negotiations had not resolved the two countries’ differences but that Washington remained open to further talks, Datamar News reported.
Eight days later, on July 23, the United States announced the separate 12.5 percent tariff on additional Brazilian exports, alleging that Brazil had failed to adopt effective mechanisms to prevent imports of goods produced with forced labor. That measure, effective July 24, was not aimed at Brazil alone. Datamar News reported that 59 other US trading partners were swept into the action, with rates ranging from 10 to 12.5 percent. Brasilia’s response to that second tranche was notably sharper in tone. In a statement quoted by Datamar News, the Brazilian government said Washington had “chosen to manipulate an issue dear to human rights and to the struggle of workers around the world to accuse 59 countries and the European Union of unfair practices.”
The tariff architecture that emerged from July is therefore layered. Non-exempt goods face 25 percent, some categories face the additional 12.5 percent, and the combined burden can reach 37.5 percent. At the same time, Washington carved out a substantial list of exemptions. UPI reported that more than 2,200 goods considered strategic were spared, and the exempt list includes coffee, beef, petroleum oils, avocados, Brazil nuts and aircraft parts, categories where US import dependence on Brazil is high. UPI calculated that the goods actually covered by the 25 percent tariff account for about 18 percent of Brazil’s exports to the United States, valued at roughly 7.4 billion dollars.
The dispute also carries an unmistakable political charge. UPI reported that President Donald Trump initially linked the trade measures to legal proceedings in Brazil against former President Jair Bolsonaro, his political ally, and that Lula has accused Washington of interference ahead of Brazil’s October 2026 elections, in which he is seeking re-election against Flavio Bolsonaro, the former president’s son. Tensions have spilled into diplomatic channels as well: UPI reported that Washington recently revoked the visa of Brazil’s ambassador to the United States.
What the Camex Procedure Actually Does
The mechanics of the reciprocity process matter as much as its symbolism, because they determine how quickly, and how far, Brazil can go. Under the implementing decree described by Datamar News, the first stage is the formation of assessment committees and the holding of public consultations with affected parties. In practice, the government has already begun this work, convening a commission with business leaders from different sectors to discuss the response to the US tariffs. The body charged with steering the process is the Interministerial Committee for Negotiation and Economic and Trade Countermeasures, chaired by Vice President Geraldo Alckmin in his capacity as minister of development, industry, trade and services, with representatives of the Chief of Staff’s Office, the Finance Ministry and Itamaraty. Camex reviews any proposed countermeasures with participation from both public officials and private sector representatives.
The second stage sets deadlines for analyzing the demands submitted by consulted sectors, and the third involves proposing and implementing measures, alongside diplomatic consultations and negotiations. The decree also authorizes the executive to adopt retaliation on a provisional basis while earlier stages are still under way, and it provides for a monitoring commission empowered to revoke or adjust countermeasures as negotiations evolve. In other words, the law gives the Lula government both a slow track and a fast track.
The reciprocity procedure is also not Brazil’s only avenue. Late last month, Brazil initiated consultations over the US tariffs at the World Trade Organization, the first formal step in the WTO dispute settlement process, and the United States responded that it was “available to meet with the representatives of your mission on a mutually convenient date to hold consultations,” according to Datamar News. In a development that analysts read as a geopolitical signal, China asked this week to join Brazil’s WTO consultations. Analysts interviewed by BBC News Brasil, cited by Datamar News, described the Chinese request as a show of support for Brasilia in its dispute with Washington, while cautioning that the WTO track is likely to have limited practical effect given the weakened state of the organization’s dispute settlement system.
Government Resolve, Industry Caution
Inside Brazil, the reaction to the procedure has split along predictable but revealing lines. The government has projected resolve. The presidential palace statement stressed both the defense of Brazilian interests in all appropriate forums and the priority given to dialogue, a dual message aimed simultaneously at Washington and at a domestic audience two months from a general election. Officials have repeatedly characterized the US measures as “arbitrary, unjustified and illegal,” in the formulation reported by UPI, and the government says it submitted extensive technical evidence contesting the US claims of unfair trade practices during the year of negotiations that preceded the July tariffs.
Brazilian industry, by contrast, has counseled restraint. The National Confederation of Industry, CNI, has publicly urged caution in applying the Reciprocity Law, arguing that the priority should be to negotiate a reversal of the tariffs or an expansion of the exemption list rather than to rush into countermeasures. CNI’s core argument, reported by the Brazilian trade press, is structural: the two economies are complementary, and a large share of bilateral commerce consists of intermediate goods, inputs that CNI estimates account for roughly 58 percent of total trade between the two countries. Tariffs on such goods, the confederation warns, would raise costs for Brazilian factories that depend on US-origin machinery, chemicals, components and fuels, effectively taxing Brazil’s own industrial base in the name of punishing Washington. The CNI’s president has gone as far as to say the law arrived at the wrong time.
That tension between political symbolism and commercial self-interest is precisely what the law’s proportionality language was written to manage. The government’s technical review will now have to weigh, sector by sector, whether restricting US imports would impose more pain on American exporters than on Brazilian buyers, and whether unconventional tools such as patent suspension would achieve leverage without chilling investment. Pharmaceutical and agricultural technology companies, whose patents Reuters sources identified as potentially in scope, are watching that calculus closely, since an IP suspension would be far harder to reverse cleanly than a tariff line.
Counting the Cost
The economic stakes are substantial but asymmetric. Bilateral goods trade between Brazil and the United States reached 94.3 billion dollars in 2025, with US exports to Brazil of 54.4 billion dollars and US imports from Brazil of 39.9 billion dollars, leaving Washington a surplus of 14.4 billion dollars. That surplus is one of the more awkward facts of the dispute for the US side, since the tariffs were justified in part as a response to unfair Brazilian practices, yet the United States sells considerably more to Brazil than it buys. UPI reported that the US surplus reached 1.5 billion dollars in the first half of 2026 alone, even as the new tariffs began to bite.
The bite is already visible in the trade data. UPI reported on August 11 that Brazilian exports to the United States have fallen to a three year low. Container flows tell the same story at product level. Datamar’s DataLiner figures, published by Datamar News, show containerized coffee bean shipments to the United States down 37.7 percent in the first half of 2026 compared with the same period of 2025, uncoated paper and paperboard down 18.9 percent, builders’ joinery and carpentry of wood down 31 percent, and strips of wood down 58.8 percent. Some of those declines predate the July tariffs, but the direction of travel is unambiguous: the United States is becoming a smaller and less predictable market for Brazilian exporters.
For the sectors on the tariff list, the arithmetic is stark. Sugar mills in the Center South, apparel producers in Santa Catarina, pulp and paper exporters, and steelmakers that had already absorbed years of US quota and tariff friction now face a 25 percent wall, rising to 37.5 percent where the forced labor duty also applies. Makers of agricultural and electrical machinery, a smaller but strategically important export segment, confront the same barrier. The exemptions, meanwhile, shield the commodities where the US consumer would have felt the pain fastest. Coffee and beef, two of Brazil’s most visible exports to the American market, flow on untaxed, as do petroleum oils, avocados, Brazil nuts and aircraft parts.
The macroeconomic exposure for Brazil is real but contained. The covered goods represent about 7.4 billion dollars in annual trade, according to UPI’s figures, a meaningful sum for the affected industries but a modest share of Brazil’s total exports, which are increasingly oriented toward Asia. China has been Brazil’s largest trading partner for more than a decade, and the current dispute is reinforcing the diversification logic. Brasilia has also been widening its options through Mercosur: UPI reported in late July that Brazil opened zero tariff trade with Singapore through the bloc’s new agreement, part of a broader push to reduce dependence on any single market. Every month the US tariffs remain in place, that reorientation hardens a little more.
Implications for Global Importers, Exporters and Supply Chains
For trade compliance teams and supply chain planners outside Brazil, the August 13 procedure changes the risk landscape in several concrete ways, even before any countermeasure lands.
The first is timing. The roughly 30 day technical mapping reported by the Rio Times, layered on the 60 day consultation window reported by UPI, gives companies a rough calendar. If consultations fail, Brazil could be in a legal position to adopt countermeasures as early as the fourth quarter of 2026, squarely in the middle of the pre-election period, when the political incentive to look firm will be at its peak. Importers of US goods into Brazil, from machinery and chemicals to fuels and medical products, should be stress testing landed cost models against surcharge scenarios now, and reviewing whether contracts allocate tariff risk clearly between buyer and seller.
The second is scope. The Reciprocity Law reaches beyond goods. Services and intellectual property are explicitly on the table, and the Reuters reporting on possible suspension of pharmaceutical and agricultural patents means that US-headquartered companies with significant Brazilian licensing revenue face a category of exposure that conventional tariff planning does not capture. Even if the government ultimately holds the IP tool in reserve, its mere availability strengthens Brasilia’s negotiating hand and injects uncertainty into royalty flows, technology transfer agreements and launch plans for patented products in the Brazilian market.
The third is the demonstration effect. Brazil is the first country to activate a statute of this kind in Latin America, and other middle powers facing unilateral US measures are watching closely. A disciplined, proportional, legally structured response that extracts concessions without triggering a spiral would validate the reciprocity law model and likely inspire imitators. A process that collapses into tit for tat escalation would teach the opposite lesson. Either way, the era in which large emerging economies absorbed unilateral tariffs without a codified response mechanism appears to be closing.
For exporters competing with Brazil in the US market, the tariffs are already redrawing sourcing maps. Buyers of sugar, apparel, paper and steel are testing alternative origins, from Central America to Southeast Asia, while the exemptions ensure that coffee roasters and beef importers feel no immediate pressure to move. For Brazilian exporters, the strategic conclusion is the mirror image: covered sectors must accelerate diversification toward Asia, the Middle East and intra-Mercosur trade, and toward the new agreements Brasilia is stitching together, while exempt sectors enjoy a reprieve that could vanish with a single Federal Register notice.
The consultations that Itamaraty is now requesting will determine which path this dispute takes. Brazil has structured its response to maximize optionality: a WTO case for legitimacy, a reciprocity procedure for leverage, and a standing offer of dialogue for an exit ramp. Washington, for its part, has said it remains open to talks even as it defends the tariffs as a response to unfair practices. Between those positions lies a negotiation that will shape not only 94 billion dollars in bilateral commerce but the template for how large economies outside the G7 answer unilateral trade power in the second half of the decade. The clock that started on August 13 is now running.