Tariffs, Justice, and Diplomacy: Trump's Tariff Surge and the Legal Implications for Brazil–U.S. Relations
By Rogério Santos do Nascimento, Brazilian Attorney
On July of 2025, the President of the United States, Donald Trump, announced the imposition of 50% tariffs on Brazilian products, initially targeting steel, aluminum, and industrial derivatives. The announcement was accompanied by a public letter addressed to the Brazilian government, in which the American president openly criticized the judicial proceedings against former president Jair Bolsonaro, labeling them as political persecution.
While the content of the letter sparked intense reactions due to its unusual nature, a head of state conditioning trade relations on judicial decisions of a sovereign nation, the legal and institutional implications of the measure go far beyond symbolic gestures. This marks a new era in the explicit use of trade as a tool of ideological, legal, and diplomatic pressure.
Trade as a Tool to Influence Sovereign Judicial Decisions
Historically, import tariffs have been used as mechanisms for protecting local industries, correcting trade imbalances, or reacting to unfair competition practices. However, President Trump's measure breaks from this paradigm: it is not a response to subsidies or dumping, but rather to discontent with the operation of the Brazilian Judiciary.
This move establishes a grave and delicate precedent: the use of economic sanctions to interfere with the internal workings of another country’s legal institutions. This directly impacts contractual security, mutual trust between legal systems, and the predictability of bilateral commercial relations.
Between Tariffs and Alliances: Brazil's Geopolitical Position
The U.S. government's gesture must also be viewed within a broader geopolitical context. Although historically aligned with the United States in economic matters, Brazil has been gradually moving closer to the BRICS+ bloc, composed of countries like China, Russia, Iran, and others. These nations are governed by authoritarian models that openly conflict with the institutional and legal values of the West.
In this scenario, the tariffs imposed on Brazil serve a dual purpose: on the one hand, they operate as symbolic retaliation for the handling of internal judicial processes; on the other, they function as a strategic containment mechanism, aimed at keeping Brazil as a stable economic and political partner of the West, and discouraging its ideological realignment with rival global powers.
Small and Mid-Sized Enterprises: The Most Vulnerable
In practical terms, the tariff surge will disproportionately affect small and mid-sized American companies that maintain contracts with Brazilian suppliers or partners. These businesses typically lack specialized legal counsel on Brazilian law and are unfamiliar with the available legal tools for contractual adaptation.
Such companies may face:
The need to revise international contracts;
Lawsuits due to unintentional breach of contract;
Missed deadlines and supply chain disruptions;
Unexpected logistical and tax burdens;
And insecurity in fulfilling liability clauses or penalty terms.
The New Public Procurement Law and Impacts on Government Contracts
Beyond the private sector, the tariff measure may also affect public contracts executed in Brazil, especially when they involve imported inputs, technologies, or services linked to U.S. companies. Law No. 14.133/2021, which governs public procurement and administrative contracts in Brazil, contains specific mechanisms to safeguard the economic and financial balance of contracts.
In particular, Article 137 provides for the termination of contracts in cases of force majeure, as follows:
Art. 137. Grounds for termination of the contract, which must be formally justified in the case files and ensure adversarial proceedings and full defense, shall include:
V – force majeure or unforeseeable circumstances, duly proven, rendering the execution of the contract impossible.
Additionally, Articles 124 and 125 of the same law allow for the unilateral amendment of administrative contracts by the Public Administration, when necessary to adjust the contract value and preserve the economic and financial balance.
Thus, a sudden increase in international tariffs may:
Justify formal requests for contractual rebalancing by Brazilian companies;
Serve as legal grounds for amendments to ongoing contracts;
And, in extreme cases, justify the termination of public contracts, if performance becomes unfeasible.
Reciprocity: Will Brazil Retaliate?
In my view, it is highly unlikely that Brazil will adopt reciprocal tariff measures, although such a response is legally possible. Brazilian legislation permits reciprocal action in international trade, supported by the Federal Constitution, Law No. 12.546/2011, and Brazil’s commitments under the World Trade Organization (WTO).
However, Brazil has historically avoided this type of retaliation for political and economic reasons. An exception might arise if the country comes under direct influence of global powers such as China or other BRICS regimes, adopting, in that case, a more ideologically driven posture aligned with anti-Western narratives. Still, such a move would break with Brazil’s traditional diplomatic approach and threaten the stability of its commercial relationship with the United States.
Economic Comparison: Brazil’s Relative Weight
To illustrate the asymmetry of power in this discussion, it is worth highlighting a stark economic fact:
Despite its continental size, vast population, mineral reserves, and energy potential, Brazil’s nominal GDP in 2024 was approximately US$ 2.18 trillion, according to IMF data.
This figure, while significant within Latin America, is lower than the GDP of three individual U.S. states:
California: approx. US$ 4.5 trillion (2024), making it the fifth-largest economy in the world if it were a country;
Texas: around US$ 2.9 trillion, supported by strong industrial, energy, and agricultural sectors;
New York: approx. US$ 2.7 trillion, driven by financial, technological, and cultural industries.
These figures reveal that three U.S. states alone generate more wealth than Brazil as a whole, despite being vastly smaller in size.
This economic reality must be taken into account in any analysis of trade policy, tariff retaliation, or balance of power in bilateral relations.
This also means that, in the short term, companies that depend on importing inputs from Brazil may face direct impacts. On the other hand, companies that export goods to the Brazilian market are unlikely to suffer immediate consequences, though they should remain alert. After all, Brazil is a country whose political and economic direction often shifts according to ideological agendas and the personal interests of those in power.
The Strategic Role of Legal Consultancy in Brazilian Law
Given this scenario, American companies and law firms engaged in relations with Brazil now face a new level of legal and contractual risk. In this context, the work of legal consultancies specialized in Brazilian Law with technical presence in the U.S. becomes essential.
This is precisely the purpose behind Lex Pathway LLC, based in Georgia, which I founded to serve this need: to support companies, attorneys, and investors in interpreting, adapting, and complying with Brazilian legal requirements across contracts, clauses, documents, and judicial decisions.
Such guidance can be critical to:
Avoid unnecessary cross-border litigation;
Identify legitimate legal solutions under Brazilian law;
Enable rebalancing or restructuring of contracts at risk;
Ensure legal certainty in bilateral business operations;
And promote consistent legal alignment between the two jurisdictions.
Final Considerations
The imposition of tariffs by the American government, driven by judicial and political motivations, opens a new chapter in Brazil–U.S. relations. It is not merely a temporary crisis but a test of institutional maturity between nations and of the ability of economic actors to respond with legal strategy and integrity.
In this environment, legal counsel becomes both a defensive and constructive tool. Contractual stability, commercial security, and mutual respect between legal systems increasingly depend on professionals who can navigate both systems with precision and ethics.
In such times of international tension, law is not merely a code of conduct. It is, in essence, the only secure bridge.