Roundup: Brazil pursues talks with U.S. but braces for potential Trump tariffs

SAO PAULO/RIO DE JANEIRO, July 21 (Xinhua) -- Brazil will negotiate with the United States over President Donald Trump's threat to impose 50 percent tariffs on Brazilian imports starting Aug. 1, Finance Minister Fernando Haddad said Monday.

Brazilian President Luiz Inacio Lula da Silva wants to keep diplomatic channels open, the finance chief told Brazilian News Center radio network.

"Brazil will not leave the negotiating table. President Lula's instruction is not to provide any reason for these types of sanctions. The vice presidency, the Treasury and the Foreign Ministry are committed to dialogue," he said.

Rui Costa, chief of staff of the Brazilian presidency, said on the same day that the country would respond calmly to Trump's tariff threat, adding that Brazil is not the only country targeted by the trade war launched by Trump.

"This is the president of a great power who has decided to fight against the entire world: Europe, Canada, and Mexico. Brazil must act and continue to act with great serenity, despite all the signs of aggression, seeking diplomatic solutions and negotiations," Costa told reporters in Salvador.

Brazil is preparing contingency plans to support sectors most affected by the potential tariffs. An inter-ministerial group is finalizing measures for Lula's review in the coming days.

Countermeasures include applying its Reciprocity Law to impose a matching 50 percent tariff on U.S. goods, along with economic support measures.

Brazil is also actively expanding trade partnerships within the Southern Common Market, or Mercosur, which includes Argentina, Bolivia, Brazil, Paraguay and Uruguay, as part of its strategy to diversify economic ties, Costa said.

"Canada has already expressed its desire to establish a partnership with Mercosur to reduce its dependence on the United States, and Mexico has done the same," said the chief of staff.

"We hope to sign the free trade agreement between the EU and Mercosur by December. This will open new markets for Brazilian industries and agriculture," Costa added.

On July 9, Trump announced plans to impose steep tariffs on Brazil, linking the move to his opposition to former Brazilian President Jair Bolsonaro, who faces trial for his alleged attempt to seize power after losing his reelection bid in 2022.

Last week, Washington suspended visas for eight Brazilian Supreme Federal Court justices overseeing Bolsonaro's trial. ■