Brazilian Finance Minister Fernando Haddad announced that trade negotiations with the United States have reached a deadlock after Washington canceled a scheduled meeting with his U.S. counterpart to discuss the 50% tariffs recently imposed on Brazilian goods.

Haddad said the talks collapsed due to what he described as an “impossible demand” from President Donald Trump’s administration, which linked the tariffs to ongoing legal disputes involving former Brazilian President Jair Bolsonaro. He added that Brazil has unveiled a $5.5 billion support package for domestic companies affected by the tariffs.

While anticipating a decline in bilateral trade, Haddad expressed confidence that the impasse would not last more than a year or two.

Brazil, the largest economy in South America, is a major exporter of agricultural products to the U.S., including coffee, soybeans, sugar, and timber, with exports worth around $40 billion last year. It is also the second-largest steel supplier to the U.S., shipping about 4 million tons in 2024, according to Brazil’s Ministry of Commerce.

Total trade between the two countries reached approximately $80 billion in 2024, with the U.S. recording a trade surplus of $200 million.