Brasília, Brazil—The Brazilian government is preparing for a potential legal showdown with the United States, threatening to take its case to a U.S. court to challenge a new 50% tariff on its exports. The move marks a significant escalation in a diplomatic and economic dispute that has been simmering for months, driven by political tensions between the two nations.

Brazil’s Finance Minister, Fernando Haddad, confirmed in an interview with the local UOL TV station on Wednesday that a lawsuit is on the table. "The tariffs are painful, but the government's position is that we can overcome them," Haddad said. "The nation cannot be the subject of lobbying efforts [for tariff reduction]; if necessary, we will go to court."

This statement follows reports in the Brazilian media, including G1 and UOL, that the Brazilian government has contracted a U.S.-based law firm. This development has fueled speculation among the opposition that the government of President Luiz Inácio Lula da Silva might be seeking a broader negotiation with the U.S., potentially extending to matters beyond trade. Some analysts have even speculated that this could involve the legal status of former President Jair Bolsonaro, who faces charges of plotting a coup.

However, Haddad was quick to dismiss these claims, emphasizing that any negotiation with the U.S. would be strictly limited to trade. "Everything we are doing is to refute the U.S. arguments" for the tariff increase, he stressed.

The tariffs were implemented by the Trump administration, which cited "the undermining of the rule of law due to political persecution, intimidation, harassment, censorship, and prosecution of former President Jair Bolsonaro and thousands of his supporters" as the reason for the high duties.

Haddad questioned the justification for the tariffs, highlighting Brazil’s long-standing trade imbalance with the U.S. "Is it right for Brazil, which has a cumulative deficit of 400 billion reais ($102 billion) with the U.S. over the last 15 years, to be hit with additional tariffs for strange reasons?" he asked. The finance minister reaffirmed Brazil's commitment to diversifying its export markets, stating, "The U.S. wants cheap raw materials, and Brazil is a supplier of cheap raw materials, but in the face of high tariffs, we will find other customers."

The dispute also casts a spotlight on the broader geopolitical landscape and the role of the U.S. dollar. As a member of the BRICS economic bloc, Brazil has been at the forefront of discussions about reducing reliance on the dollar. A Reuters report highlighted Haddad's comments on the subject, in which he warned that the "weaponization of the dollar" could weaken its dominance. "As long as there are no continued mistakes," the dollar will remain the world's reserve currency, he noted, "but if transaction costs can be lowered, other countries cannot be prevented from trading in local currencies."

The potential lawsuit signals Brazil's determination to fight what it views as politically motivated trade measures. The outcome could set a precedent for how countries respond when political and economic issues become intertwined in international trade relations.