Trump threatens 50% tariffs on Brazil

US President Donald Trump on Wednesday threatened Brazil with a crippling tariff of 50% starting August 01, according to a letter he sent to the country’s president, Luiz Inácio Lula da Silva.

In the letter posted on Truth Social, Trump alleged Lula is undertaking a “Witch Hunt that should end immediately” over charges against its right wing former president, Jair Bolsonaro.

Bolsonaro, who has bragged about his closeness with Trump, is facing trial for allegedly attempting to stage a coup against Lula.

Bolsonaro and dozens of associates have been charged with attempting a coup d’état, which prosecutors allege involved a plan to potentially assassinate elected President Luiz Inácio Lula da Silva.

Lula vowed to reciprocate if Trump follows through with his threat.

“Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage,” Lula said in a post on X.

“Any measure to increase tariffs unilaterally will be responded to in light of Brazil’s Law of Economic Reciprocity,” he added.

This marks the first time in months another country has threatened to match Trump’s tariff threat.

Unlike the 21 other countries that have received letters from Trump this week, Brazil was not set to face “reciprocal” tariffs in April. Goods from there have instead been tariffed at a minimum of 10%, which is the rate Trump has been taxing most goods from countries that were set to face “reciprocal” tariffs.

Unlike the other 21 countries, the US ran a US$6.8 billion trade surplus with Brazil last year, meaning the US exported more goods to there than it imported from there. That means Brazil’s 50% tariff on American goods could severely harm domestic businesses that rely on exporting goods there.

This is not the first time Trump has used the threat of tariffs to try to change other countries’ domestic policy decisions.

Earlier this year, he threatened 25% tariffs on Colombian exports that would grow to 50% if the country didn’t accept deportees from the US. Colombia ultimately accepted the deportees and avoided those tariffs.

Trump also imposed tariffs on goods from Mexico, Canada and China over the role he alleges they play in facilitating illegal migration to the US and enabling fentanyl to reach the country.

In all the letters except the one sent to Brazil’s Lula, Trump wrote that he takes particular issue with the trade deficits the United States runs with other nations, meaning America buys more goods from there compared to how much American businesses export to those countries. Trump also said the tariffs would be set in response to other policies that he deems are impeding American goods from being sold abroad.

JPMorgan economists said in a note to clients on Wednesday titled “Another day, another step closer to Liberation Day” that the 50% tariff threat on Brazilian goods was “most surprising.” (“Liberation Day” refers to April 02, the day Trump held a Rose Garden event to announce “reciprocal” tariff rates.)