“Trade war with the USA could make products more expensive and affect jobs”, says industrial entity

The Federation of Industries of the State of Minas Gerais (FIEMG) warned this Friday (14) that an escalation of trade retaliations between Brazil and the United States could increase production costs, affect investments and put pressure on jobs in the country. The entity spoke out after the new activation of the Economic Reciprocity Law by the Brazilian government, in response to the tariff measures adopted by the United States. For the federation, Brazil must defend its interests, but avoid an escalation of the trade dispute. Retaliation is not automatic According to FIEMG, the activation of the Reciprocity Law does not mean that Brazil will immediately apply tariffs or other measures against American products. The legislation had already been activated in 2025. At that time, the Chamber of Foreign Commerce (Camex) analyzed the case, and the Executive Management Committee (Gecex) formally recognized the framework in the law. As negotiations between Brazil and the United States progressed, however, the government chose to prioritize diplomatic consultations before defining possible countermeasures. No retaliatory tariffs, commercial restrictions or measures related to intellectual property were applied. FIEMG defends that negotiation remains the priority to expand exceptions to American tariffs, reduce barriers and preserve access for Brazilian products to the United States market. Industry fears increased costs The federation states that possible retaliatory measures need to be carefully evaluated. The application of tariffs on American products used by Brazilian industry itself, such as inputs, machines, equipment and technologies, could increase production costs and reduce the competitiveness of companies. In the entity's assessment, Brazil could end up being harmed twice: first, by the difficulty in accessing the American market and, second, by the increase in the costs of imported products used in national production. FIEMG also states that a trade war is of no interest to either Brazil or the United States. Study estimates loss of R$259 billion in GDP The entity also cites a study carried out in 2025 to assess the possible effects of a tariff escalation. In a hypothetical scenario of a 50% reciprocal surcharge on imports from the United States, FIEMG estimated that the loss to the Brazilian Gross Domestic Product (GDP) could reach R$259 billion, equivalent to 2.21% of the economy. According to the federation, the effects of a trade dispute would not be restricted to exports and imports. The entity foresees possible impacts on suppliers, workers, investments, production and revenue. Therefore, FIEMG advocates that Brazil use its trade defense instruments strategically and maintain negotiations with the United States as a priority. The entity states that the objective should be to seek the reversal or reduction of trade barriers, while preserving contracts, investments, production and jobs.