Brazil moves forward with its Economic Reciprocity Law

Gecex rules that the US tariffs fall within the scope of the Economic Reciprocity Law and sets up a Working Group to propose countermeasures. Companies with operations, investments or trade between Brazil and the US will have a defined window to put forward their input in the public consultation.

In brief

At its 242nd Ordinary Meeting, the Executive Management Committee (Gecex) of Brazil’s Chamber of Foreign Trade (Camex) ruled that the US tariffs imposed on Brazilian goods under Sections 301 and 232 fall within the scope of Law No. 15,122/2025 (the Economic Reciprocity Law), and set up a Working Group to propose countermeasures under Decree No. 12,551/2025.

A countermeasure is the tool Brazil uses to respond to those tariffs. It may take the form of additional duties or other restrictions on US goods and services, the suspension of trade or investment concessions and, in exceptional cases, the suspension of intellectual property obligations.

None of this has been adopted yet. No products, services, sectors, tariff rates or effective dates have been set. The Working Group will draft a proposal, which will go through a public consultation of up to 30 days before returning to Gecex and to Camex’s Strategic Council for a decision. The public consultation is the window for companies to put forward data on how the measures would affect them.

In more detail

With the scope ruling in place, the proceeding moves on to the drafting of a countermeasure proposal. The decision does not define the content of Brazil’s response, nor does it amount, on its own, to a finding on whether the US measures are consistent with World Trade Organization rules.

Under Decree No. 12,551/2025, the proceeding will follow these steps:

• Working Group. Coordinated by Camex’s Executive Secretariat and made up of representatives of its members, it will draft the proposal. Other government bodies, experts and private-sector representatives may be invited to take part.
• Public consultation. Gecex will put the preliminary proposal out for public consultation for up to 30 days. This is the stage at which companies will be able to submit data on the impact of the proposed measures.
• Camex decisions. After the public consultation or the conclusion of the Working Group’s work, the proposal goes to Gecex and then to Camex’s Strategic Council, which will have up to 60 days to decide, extendable once for the same period.

The adoption of countermeasures may be postponed depending on how diplomatic negotiations evolve. If approved, the measures will still require implementing acts by the competent authorities. It is therefore not possible, at this stage, to estimate when any measure would take effect. The instrument and reach of Brazil’s response will depend on the Working Group’s proposal and on Camex’s subsequent decisions.

Where a countermeasure could hit

• The cost of goods, inputs and components imported from the US.
• Services, technology, software, licenses, royalties and intellectual property rights sourced from US providers.
• Investments and intercompany dealings between the two countries.
• Brazilian exports to the US, should the dispute escalate.

Recommended actions

• Quantify exposure by tariff code and by contract. Map, by tariff code (NCM), the volume and value imported from the US over the last twelve months, including US-origin goods routed through third countries, and match them against the corresponding supply contracts. This is what allows a company to estimate, in actual figures, the effect of any hypothetical tariff rate and to tell quickly whether it is on the list once the proposal is published.
• Test substitutability before it becomes necessary. For critical inputs, check whether there is an alternative supplier in Brazil or in a third country, how long technical and regulatory qualification would take, and whether a change of origin alters the classification or tariff treatment of the finished product. Where there is no viable alternative, document it: this is the strongest argument for a product exclusion request in the public consultation.
• Establish who bears the tariff under existing contracts. Review price, adjustment, tax pass-through, change-in-law, hardship and force majeure clauses in contracts with suppliers and customers, and check whether a Brazilian countermeasure falls within the triggers already in place or whether renegotiation will be needed. For intercompany dealings, assess the impact on transfer pricing policy and on how the cost is allocated between the Brazilian and the US entities.
• Build the file for the public consultation. Start gathering now the data on local production, jobs, investments made and planned, costs, and the impact on consumers and on the downstream chain, already split into a public and a confidential version. Thirty days is a short window to produce this material from scratch; companies that arrive with the file ready can argue for product exclusions or lower rates on the basis of evidence rather than general assertions.
• Align the position with headquarters and with the US front. Align the Brazilian strategy with the one the group is pursuing in the US under the Section 301 and 232 proceedings, including any pending exclusion requests, so as to avoid contradictory positions before the two authorities. Also consider acting through trade associations, which tend to have better access to the Working Group, and avoid hard-to-reverse changes to the supply chain until the content of the proposal is known.