US ramps up tariffs again—Lula warns Brazil won’t accept “treatment” as US-EU deal faces compliance tests

On June 3, 2026, US Trade Representative Jamieson Greer told FRANCE 24 that the US and EU remain committed to complying with their trade deal, even as the US proposed fresh tariffs on Wednesday. Greer framed the situation as manageable, arguing there is “a lot of room” for continued compliance despite the tariff move, and emphasized that both sides are committed to meeting obligations. In parallel, US reporting indicates Washington plans extra tariffs of 10% or more for trading partners, signaling a broader escalation posture rather than a narrow, one-off adjustment. Brazilian coverage also shows President Luiz Inácio Lula da Silva reacting sharply to the new US charges announced earlier in the week, describing Brazil as surprised and arguing the country cannot accept the way the US handled the issue. Strategically, the cluster points to a US tariff strategy that simultaneously pressures partners while trying to preserve the political credibility of existing trade frameworks. Greer’s insistence on compliance with the US-EU deal suggests Washington wants to keep the EU channel from collapsing into a full trade war, even while using tariffs as leverage elsewhere. Lula’s comments and his instruction to ministers to avoid introducing new proposals until after elections indicate Brazil is seeking to reduce domestic political “wear and tear” while calibrating its response to US economic coercion. The power dynamic is clear: the US is raising the cost of market access, while Brazil is attempting to keep negotiations open and maintain bargaining space through dialogue rather than immediate retaliation. Market and economic implications are likely to concentrate in trade-sensitive sectors tied to tariff exposure and supply-chain routing. A 10%+ tariff plan typically transmits quickly into import prices, input costs, and pricing expectations for industrial goods, consumer durables, and intermediate commodities, with knock-on effects for inflation expectations and corporate margins. For Brazil, the immediate risk is higher costs for US-linked imports and potential retaliation dynamics that can hit exporters, especially in areas where Brazil competes in global commodity and manufactured-goods markets. Currency and rates can also react as tariff uncertainty increases risk premia; investors often price such episodes through higher volatility in BRL and a more cautious stance on Brazilian risk assets. What to watch next is whether the US converts the “10% or more” concept into specific tariff lines, timelines, and exemptions, and whether the EU compliance narrative holds under the new tariff regime. For Brazil, the trigger is Lula’s election-period guidance: if ministers are restrained from new initiatives, Brazil’s response may shift toward diplomatic channels and targeted negotiations rather than rapid policy escalation. Key indicators include announcements from USTR on tariff scope, Brazilian ministry statements on trade talks, and any signals of retaliatory measures or sectoral carve-outs. Escalation risk rises if tariffs broaden without exemptions and if Brazil moves from dialogue to concrete counter-tariffs; de-escalation becomes more likely if both sides align on compliance mechanisms and a structured negotiation timetable after the election window.

Geopolitical Implications

• 01

  The US is using tariff escalation as leverage while attempting to prevent the EU channel from collapsing, creating a two-track bargaining environment.

• 02

  Brazil’s response indicates a preference for negotiation and domestic political control, but the rhetoric raises the risk of a faster deterioration if tariffs broaden.

• 03

  Trade friction can reshape alignment incentives in the Americas, pushing partners to seek alternative markets or negotiate side deals to reduce exposure.

Key Signals

• —USTR announcements specifying tariff scope, affected HS codes, and any forced-labor or compliance-linked conditions
• —EU statements on whether compliance mechanisms remain intact under the new US tariff posture
• —Brazilian ministry communications on trade talks with the US and whether any retaliatory measures are being prepared
• —FX and rates volatility in BRL and Brazilian credit as tariff headlines evolve