Brazilian President Luiz Inacio Lula da Silva declared on Wednesday that Brazil will respond in kind to U.S. President Donald Trump’s newly announced 50% tariff on Brazilian exports. He cited a recently adopted Brazilian law that authorizes the government to impose proportional countermeasures.
Trump’s Tariff Announcement
Trump announced that the U.S. will impose a 50% tariff on imports from Brazil starting August 1. The move partly serves as retaliation for the ongoing prosecution of Brazil’s former president, Jair Bolsonaro.
In a letter to da Silva, Trump framed the tariff hike—an increase from the 10% rate imposed in April—as a response to what he called a “very unfair trade relationship” between the two countries.
Unlike previous tariff notices sent to nearly two dozen other countries, Trump’s letter to Lula explicitly links the tariffs to Brazil’s internal political and legal affairs, marking a harsher approach.
In response, da Silva emphasized Brazil’s sovereignty and independence, rejecting what he called unwelcome lecturing.
“Brazil is a sovereign country with independent institutions that will not accept being lectured by anyone,” he wrote on social media.
Immediate Market Impact
Following the announcement, Brazil’s currency, the real, fell more than 2% against the U.S. dollar.
Trump’s criticism of Brazil centers on Bolsonaro’s prosecution, whom Trump calls a “vocal ally” and describes the trial as a “Witch Hunt.” He also accused Brazil of undermining free elections and American free speech, apparently referring to a recent ruling by Brazil’s Supreme Court holding social media platforms responsible for user content.
Trump claimed that Brazil’s trade policies have caused “unsustainable Trade Deficits against the United States,” threatening U.S. economic and national security. However, U.S. data shows a goods trade surplus of $7.4 billion with Brazil in 2024.
Da Silva countered Trump’s trade deficit claims by citing official U.S. figures.
Ongoing Investigations and Warnings
Trump indicated the U.S. is investigating Brazil for unfair trade practices related to “attacks on the Digital Trade activities of American Companies.”
He warned that the 50% tariff is “far less than what is needed to have the Level Playing Field we must have with your Country” and described it as necessary to “rectify the grave injustices of the current regime.”
Trump’s letter to Brazil shares language with tariff letters sent to 21 other countries since Monday. These letters impose tariffs between 20% and 40%, effective August 1, and warn that if those countries raise their own tariffs on American goods, the U.S. will match those increases.
They also state that the U.S. may adjust tariffs “upward or downward” based on its relationship with each country. Recipients include major trade partners like Japan and South Korea, as well as smaller economies such as Moldova and Brunei.
Trump has insisted that no extensions beyond August 1 will be granted.
Author’s Opinion
Targeting Brazil with a 50% tariff tied to its internal politics signals a shift from trade policy to geopolitical posturing. While tariffs can address unfair trade practices, using them as punishment for legal actions undermines diplomatic norms and risks economic backlash. Such moves complicate international relations and may hurt businesses and consumers on both sides more than they pressure governments.
Featured image credit: Casa de América via Flickr
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