By Lisandra Paraguassu, Gabriel Araujo

BRASILIA (Reuters) – Brazilian President Luiz Inacio Lula da Silva stated on Thursday that his government would respond reciprocally if U.S. President Donald Trump imposed tariffs on Brazil, calling for mutual respect.

> “It is very simple: if he taxes Brazilian products, there will be reciprocity,” Lula told a press conference in Brasilia.

The United States maintains a trade surplus with Brazil, reportedly reaching $253 million last year. However, Trump recently designated Brazil as one of the countries he believes has caused harm to the U.S., threatening potential tariffs.

> “China is a tremendous tariff maker, and India, Brazil, so many countries,” Trump said during a speech on Monday. “So we’re not going to let that happen any longer, because we’re going to put America first.”

The U.S. is a significant importer of Brazilian oil, steel, coffee, aircraft, and orange juice, while Brazil imports energy products, pharmaceuticals, and aircraft parts from the U.S., among others. A Brazilian official indicated that the country’s trade deficit with the U.S. might help it evade tariffs that Trump has pledged against numerous nations; Brazil has not had a trade surplus with the U.S. since 2008.

> “I have governed Brazil while the U.S. had Republican and Democratic presidents, and our relationship has always been between two sovereign countries,” stated Lula, who began his third, non-consecutive term in 2023.

> “Trump was elected to run the U.S. and I was elected to run Brazil. I will respect the U.S. and want Trump to respect Brazil. That’s all,” Lula noted.

Lula, leaning left, previously maintained friendly relations with Trump’s Democratic predecessor, Joe Biden, while Trump was closer to Brazil’s far-right former President Jair Bolsonaro, labeled the “Trump of the tropics.”

MARKET-FRIENDLY REMARKS

During the press conference, Lula expressed his support for non-interference in the monetary policy and pricing strategy of state-controlled oil company Petrobras, delivering market-friendly remarks following a decline in his approval ratings.

He also noted that if further fiscal measures are required during the year, “we will consider them,” in response to growing concerns about Brazil’s increasing public debt.

Lula remarked that central bank chief Gabriel Galipolo “did what he thought was necessary” after policymakers elevated the key interest rate by 100 basis points to 13.25% on Wednesday.

Lula affirmed that Galipolo, who assumed office earlier this month, would determine the right conditions for reducing interest rates “at the appropriate time” with full autonomy in his position.

In light of reports suggesting Petrobras may implement a diesel price hike, Lula stressed that the decision lies with the company, “not the president.”

> “Petrobras does not need to inform me (about fuel price adjustments). If Petrobras finds it essential to make an adjustment, then they can do it,” he added.

A Genial/Quaest poll released this week revealed a decline in Lula’s approval ratings, with disapproval now exceeding approval for the first time in two years. This shift is attributed to rising food prices, fears of heightened taxation, and market instability.

When questioned about measures to alleviate food-related inflation, Lula dismissed options that could lead to a black market, stating, “What we can do is increase production of everything we can produce.”

The Brazilian real mitigated some earlier losses following Lula’s comments, trading down by about 0.4% against the U.S. dollar. Simultaneously, the benchmark Bovespa stock index gained 1.8%.