Brazil's Lula warns Trump's tariffs risk inflation, vows WTO challenge on steel

TOKYO (Reuters) - Brazil's President Luiz Inacio Lula da Silva said U.S. President Donald Trump risked damaging the U.S. economy with additional tariffs and vowed to lodge a complaint with the World Trade Organization (WTO) over a trade levy on Brazilian steel.

"It will raise the prices of goods and could lead to inflation that he hasn't yet realised. Protectionism doesn't help any country in the world," Lula said on Thursday at a press conference in Tokyo.

Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks starting next week, widening the global trade war he began after becoming president in January.

On March 12, his administration also imposed a 25% tariff on all steel and aluminum from Brazil, the second-largest exporter to the American market after Canada. The Brazilian government has so far failed to renegotiate a return to a policy of annual tariff-free export quotas.

"We have two decisions to make. One is to appeal to the World Trade Organization, which we will do, and the other is to impose higher tariffs on American products. We can't just stay quiet," Lula said in Tokyo, where he met Japanese Prime Minister Shigeru Ishiba on Wednesday for talks aimed at booster economic and trade ties.

(Reporting by Tim Kelly in Tokyo and Lisandra Paraguassu in Brasilia; Editing by Jamie Freed and Stephen Coates)