WashingtonPresident Donald Trump singled out Brazil for 50% import taxes on Wednesday due to the country’s treatment of former President Jair Bolsonaro, demonstrating that the U.S. leader’s use of tariffs is motivated more by personal grievances than by sound economic reasoning.
By linking his tariffs to Bolsonaro’s trial—he is accused of attempting to reverse his 2022 election defeat—Trump eschewed his customary form letter to Brazil. When both were in office in 2020, Trump hosted the former Brazilian president at his Mar-a-Lago club and called Bolsonaro a friend.
In the letter published on Truth Social, Trump stated that this trial should not be held. This witch hunt needs to stop right away!
Trump was charged in 2023 for his attempts to reverse the outcome of the 2020 U.S. presidential election, so there is a sense of connection. The Brazilian president Luiz Inacio Lula da Silva, who defeated Bolsonaro in 2022, received the tariff letter from the U.S. president.
The country’s economic reciprocity statute, which permits trade, investment, and intellectual property agreements to be suspended against nations that hurt Brazil’s competitiveness, would be activated by Trump’s tariffs, Lula retorted in a strong statement.
He pointed out that over the previous 15 years, the U.S. and Brazil have had a trade surplus of almost $410 billion.
According to Lula, Brazil is a sovereign nation with autonomous institutions that will not tolerate being taken advantage of.
In June, Bolsonaro gave testimony before the nation’s Supreme Court regarding the purported conspiracy to hold onto power following his defeat in the 2022 election. In the upcoming months, judges will hear arguments from 26 additional defendants, and according to legal experts, a decision may be made as early as September. Bolsonaro has already been prohibited from seeking office by the nation’s election officials until 2030.
The former president claimed that Trump is the target of political persecution on social media, but he made no comments regarding the tariff decision.
Lula defended the nation’s legal system in his statement, claiming that the Brazilian judiciary has the authority to prosecute those responsible for the coup d’etat and that threats or meddling that compromise the autonomy of national institutions are not permitted.
The tariffs are personal to Trump.
Trump also took issue with Brazil’s Supreme Court fining social media companies, claiming that last year’s brief restriction amounted to illegal and secret censorship orders. In light of this, Trump announced that he is opening an investigation under Section 301 of the Trade Act of 1974, which covers nations whose trade policies are thought to be unjust to American businesses.
X was one of the businesses that the Supreme Court penalized, though Trump’s letter made no mention of it. The owner of X is Elon Musk, a multibillionaire who supported Trump in the 2024 election and whose tenure as head of Trump’s Department of Government Efficiency ended recently, sparking a public dispute over the U.S. president’s budget proposal that would increase the deficit. Trump is also the owner of Truth Social, a social media platform.
According to Lula’s statement, “Freedom of speech in Brazil is not confused with aggression or violent behavior.” “All businesses, domestic or foreign, must abide by Brazilian law in order to conduct business in our nation.
Congressman Eduardo Bolsonaro and Sen. Flvio Bolsonaro, two of Bolsonaro’s sons, were held accountable by Lula-aligned Brazilian MPs for Trump’s tariff decision. The Senate whip for Lula’s Workers Party, Sen. Lindbergh Farias, stated on social media that the Bolsonaros must be delighted to damage Brazil, our jobs, and our economy.
The letter from Brazil served as a reminder that the importance of politics and relationships with Trump is equal to those of economic principles. Trump has stated that trade imbalances are the basis for the high tariff rates he is imposing, but his actions on Wednesday left it unclear how the targeted nations will contribute to America’s reindustrialization.
The 10% rate that Trump imposed on Brazil as part of his April 2 Liberation Day declaration would be drastically increased by the tariffs that would go into effect on August 1. Brazil exports a variety of goods to the United States, including steel, coffee, orange juice, and oil. According to the Census Bureau, the United States had a $6.8 billion trade surplus with Brazil last year.
Declaring an economic emergency in accordance with a 1977 legislation, Trump first justified his wide tariffs by claiming that the United States was in danger due to ongoing trade imbalances. However, that justification is called into question in this instance as Trump is tying his tariffs to the Bolsonaro trial and the United States exports more goods to Brazil than it imports.
Trump also singled out smaller trading partners.
On Wednesday, Trump also wrote to the heads of seven additional countries. The United States has no significant industrial rivals, including the Philippines, Brunei, Moldova, Algeria, Libya, Iraq, and Sri Lanka.
Trump has used the tariffs to demonstrate the U.S.’s financial and diplomatic might against both allies and adversaries, despite the majority of economic evaluations predicting that they will aggravate inflationary pressures and slow economic development. Import levies are expected to reduce trade imbalances, partially offset the cost of the tax cuts he signed into law on Friday, and bring factory jobs back to the United States, according to his administration’s promises.
Trump promoted trade as a diplomatic instrument when he met with African leaders at the White House. According to him, trade appears to be the basis for resolving conflicts between Kosovo and Serbia, as well as between India and Pakistan.
Trump declared, “You guys are going to fight, we’re not going to trade.” And we appear to be rather successful at it.
Despite the Brazil letter’s indications to the contrary, Trump claimed in his letters that the tariff rates were based on trade imbalances and common sense. Since these nations are now friends of mine, Trump claimed he had not considered punishing the leaders of Liberia, Senegal, Gabon, Mauritania, and Guinea-Bissau, whose leaders were meeting with him in the White House.
Although those tariffs have been quite close to the ones imposed on April 2 that shook financial markets, he added that nations are not complaining about the rates indicated in his letters. On Wednesday, the S&P 500 stock index increased.
Trump stated, “I’m keeping them at a very low number, very conservative as you would say,” which is why there haven’t been many complaints.
With Trump’s letters, tariff uncertainty has returned.
European Union officials, a key trading partner and target of Trump’s trade ire, stated on Tuesday that they do not anticipate receiving a letter from Trump outlining duty rates. On Monday, the Republican president began the process of announcing tariff rates by imposing 25% import tariffs on South Korea and Japan, two significant trading partners of the United States.
Trump’s letters on Wednesday stated that imports from the Philippines would be subject to a 20% tax, those from Moldova and Brunei to a 25% tax, and those from Libya, Iraq, Algeria, and Sri Lanka to a 30% tax. Tariffs would go into effect on August 1.
The response from the Philippine government has been very mild. Jose Manuel Romualdez, its ambassador in Washington, stated that the nation will look to engage in fresh talks with the United States in order to reduce the 20% tax.
The U.S. had a $1.4 billion trade imbalance on products with Algeria, $5.9 billion with Iraq, $900 million with Libya, $4.9 billion with the Philippines, $2.6 billion with Sri Lanka, $111 million with Brunei, and $85 million with Moldova last year, according to the Census Bureau. The disparity between what the United States imported and what it exported to foreign nations is represented by the imbalance.
When combined, the trade imbalances with those seven nations amount to little more than a rounding error in the $30 trillion gross domestic product of the United States economy.
Following the conclusion of a 90-day negotiation session with a baseline levy of 10%, the letters were published on Truth Social. Trump has stated that there will be no extensions for the nations who get letters, but he is allowing them additional time to negotiate before his deadline of August 1.
The president promised to impose more tariffs on any nation that tries to strike back.
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Rio de Janeiro was the reporting location for Savarese. This article was written by Associated Press writers David McHugh in Frankfurt, Germany; Jim Gomez in Manila; and Eileen Ng in Kuala Lumpur, Malaysia.
