Brazil’s Finance Minister Fernando Haddad said Monday that negotiations with the United States over looming trade tariffs remain ongoing, but acknowledged that a deal may not be reached before the August 1 deadline, when sweeping United States duties are set to take effect.

“That could happen,” Haddad told radio station CBN, referring to the possibility that no agreement will be reached in time. He added that Brazil is still awaiting a response from Washington to trade proposals submitted in May.

Earlier this month, former U.S. President Donald Trump announced a 50% tariff on Brazilian goods, citing what he described as “unfair” trade practices and a “witch hunt” against former Brazilian leader Jair Bolsonaro, who is currently on trial for allegedly plotting a coup.

Haddad said the Brazilian government has contingency plans in place should the tariffs proceed, including the possibility of redirecting over half of its U.S.-bound exports to other international markets. “But that would take time,” he noted.

The United States is a major buyer of Brazilian exports including oil, steel, coffee, aircraft, and orange juice. Despite this, the U.S. maintains a trade surplus with Brazil — a fact officials in Brasília have used to challenge the rationale behind the proposed tariffs.

Among the companies likely to be most affected is Embraer, Brazil’s flagship aircraft manufacturer, which counts the U.S. as its largest market.

While President Luiz Inácio Lula da Silva has pledged a reciprocal response if the tariffs are enacted, Haddad emphasized that Brazil does not intend to retaliate against American companies operating domestically. “We cannot pay back in kind something that we consider unfair,” he said.

Haddad added that government support may be extended to shield key sectors from the impact of U.S. measures, though such assistance would not necessarily increase primary public spending.