Understand how the Reciprocity Law works and what its applications are With the confirmation that the United States will apply an additional tariff of 25% on part of Brazilian products exported to the country, the government of President Luiz Inácio Lula da Silva (PT) intensified discussions on what practical response it will give to the measure. The first movement came shortly after the announcement of Donald Trump's administration. In a statement released in the early hours of Thursday (16), the Palácio do Planalto classified the American decision as a "regrettable milestone" and stated that it would begin the procedures to activate the Economic Reciprocity Law. ? ? The law, approved by the National Congress and sanctioned by Lula in 2025, allows the Brazilian government to adopt retaliatory measures against countries or economic blocs that impose commercial, legal or political barriers to Brazil. (read more below) To date, however, the government has not yet announced concrete responses based on legislation. In a press conference alongside ministers, vice-president Geraldo Alckmin adopted a tone of defense of sovereignty, but limited himself to saying that the law will be applied "at the appropriate time". Meanwhile, time is running out: the additional 25% tariff comes into effect next Wednesday (22). Despite the extensive list of exempt products — including oil, coffee and beef — sectors such as ethanol, agricultural machinery and paper will be affected by the measure. (see the full list) For experts interviewed by g1, the Brazilian government's reaction should not, in fact, come anytime soon. The assessment is that the Lula administration must maintain a tough political tone, but preserve technical dialogue and adopt caution in practical actions — including the possible use of the Reciprocity Law. This is because a hasty reaction can bring risks. The eventual use of the law, in addition to requiring extensive analyzes of the impacts on the Brazilian market, goes through a long process, which includes a series of new discussions. "The law provides for several phases. First, the case goes through the Chamber of Foreign Trade. Then, through public consultation. It also involves consultations with the US government itself. So, it is not something immediate", explains Welber Barral, former Secretary of Foreign Trade. But what are the risks of using the law? One of the main fears is the impact on prices for Brazilian consumers. The logic is simple: if the government chooses to surcharge American products, Brazil would also make part of its imports more expensive. In practice, this increase in costs tends to be passed on to end consumers, creating a double negative effect for the country, explains foreign trade specialist Jackson Campos. "Brazil would lose twice. First, with the taxes already applied to exports to the USA. Then, when a possible import tax is passed on to the Brazilian consumer", he states. Therefore, the government treats any reaction with caution. In addition to the application of tariffs, the Reciprocity Law provides for other instruments to respond to the USA — which are still under analysis. Experts interviewed by g1 point out the main ones: Patents: Brazil could suspend part of the international intellectual property rules, affecting the protection of patents for companies in the country targeted by the measure. Services: could impose tariffs, surcharges or other restrictions on services provided by companies in the target country. Investments: could suspend benefits, incentives or facilities granted to investments by companies in the target country. Commercial agreements: could suspend benefits and concessions provided for in commercial agreements signed with the target country. "The law requires that the measures have counterparts and are, as far as possible, proportional to the damage suffered by those who caused that damage. Furthermore, it is necessary to try to minimize the effects on the Brazilian economy", says Jackson Campos. Meanwhile, there is another point of caution on the Brazilian government's radar: concern about a possible escalation in tensions with Donald Trump's administration — which could be irritated by the Brazilian reaction and respond with new tariffs. ?? This is what happened in the dispute between China and the USA, when the trade war took tariffs to levels above 100% and practically paralyzed trade between the two countries. "The final document issued by the American government states that, if Brazil increases tariffs in retaliation, Washington may understand that the 25% is not enough and raise the rate even further", recalls Campos. Lula and Trump Adriano Machado/Reuters; Evelyn Hockstein/Reuters What, then, are the options for Brazil? Thiago de Aragão, CEO of Arko Internacional, believes that the main risk of a response to the US is "Brazil retaliating and hurting itself". He remembers that Brazilian "ammunition" is limited, since a large part of what the country imports from the Americans are inputs, machines and parts that enter the national production chain. "If you tax these products, it's not the Americans who pay, it's the rural producer from Mato Grosso who needs the tractor part. A poorly calibrated retaliation would be an own goal with epic narration", he says. ? In the commercial investigation that resulted in the application of the 25% tariff, the Trump administration states that Brazil adopts practices that "encumber or restrict" trade with the USA, citing topics such as the PIX payment system, access to the ethanol market, illegal deforestation and piracy. ? The justifications were strongly contested by the Brazilian government, which sees the measure as an attempt to interfere in the country's internal policies, by including topics considered non-negotiable, such as PIX. The assessment in Brasília is that the tariff is politically motivated, and not just commercially motivated. In this scenario, Aragão points out three possible ways for Brazil to deal with tariffs, given the accusations made by Washington against the country. Technical negotiation, item by item. According to him, ethanol is among the topics with room for agreement, while PIX, considered non-negotiable