Brazil's Haddad: There are Brazilians linked to former president Bolsonaro working to prevent negotiations with the US on tariffs from being initiated

Brazil's Haddad: There are Brazilians linked to former president Bolsonaro working to prevent negotiations with the US on tariffs from being initiated

Brazil's finance minister, Fernando Haddad, has acknowledged that there may be Brazilians linked to former President Jair Bolsonaro working to prevent negotiations with the United States on tariffs from being initiated. This revelation comes as Brazil braces for potential economic impacts from the looming 50% tariffs set to take effect on August 1.

Haddad's comments were made in the context of Brazil's ongoing efforts to secure a trade deal with the United States. The finance minister has stated that Brazil is still awaiting a response from Washington to trade proposals submitted in May. Despite the uncertainty, Haddad remains hopeful about the possibility of reaching an agreement before the August 1 deadline [1].

The potential tariffs, if implemented, could have significant economic repercussions for Brazil. According to a report, Brazil faces potential losses of up to BRL175bn ($31.7bn) over the next decade if the US follows through on its plans [4]. The Federation of Industries of the State of Minas Gerais (Fiemg) estimates that the tariffs could eliminate 1.3mn jobs and deliver a negative 1.49% impact on GDP in the long term.

In response to the tariff threat, Brazil has been actively seeking alternative trade partners. President Lula has proposed deepening bilateral trade relations with Mexico and has sent a mission to Mexico in August to expand the trade agreement between the two countries. Additionally, Brazil is using its rotating presidency of Mercosur to engage countries interested in new trade deals [3].

Despite these efforts, the diplomatic vacuum in Brazil, with no U.S. ambassador currently posted, has made negotiations more challenging. The U.S. Embassy in Brasília is currently led by Chargé d’Affaires Gabriel Escobar, who has directed Brazilian authorities to contact the United States Trade Representative (USTR) [3].

Brazil has also taken legal action, filing a complaint at the World Trade Organization (WTO) over the new tariffs. The move is seen as both necessary and symbolic, given Brazil’s strong defense of the multilateral system, although it is unlikely to produce concrete results due to the WTO’s weakened role [3].

In conclusion, Brazil's efforts to secure a trade deal with the United States face potential obstacles, including those linked to former President Bolsonaro and the diplomatic vacuum. Despite these challenges, Brazil is actively seeking alternative trade partners and legal recourse to mitigate the impact of the potential tariffs.

References:
[1] https://www.reuters.com/world/americas/brazil-acknowledges-possibility-no-us-trade-deal-by-august-1-2025-07-21/
[2] https://www.tradingview.com/news/te_news:472480:0-ibovespa-falls-as-tariff-fears-mount/
[3] https://valorinternational.globo.com/foreign-affairs/news/2025/07/24/brazil-finalizes-tariff-plan-seeks-trade-deal-with-mexico.ghtml
[4] https://www.intellinews.com/brazil-braces-for-32bn-economic-hit-from-trump-tariff-threat-392667/