What happened
President Donald Trump Wednesday announced plans to impose a 50% tariff on all Brazilian imports, in part due to the treatment of its far-right former leader Jair Bolsonaro. In a letter posted on social media, Trump accused Brazil's President Luiz Inácio Lula da Silva of leading a "witch hunt" against Bolsonaro, who is facing prosecution over his alleged role in a plot to overturn the country's 2022 election. The threatened tariffs on Brazil, Latin America's biggest economy, would be the highest yet imposed on any nation by the Trump administration.
Who said what
In his letter to the Brazilian president, commonly known as Lula, Trump blasted the treatment of his ally Bolsonaro as an "international disgrace" and said his trial "should end IMMEDIATELY!" In response, Lula said Brazil would "not accept being abused by anyone."
This tariff hike is clearly "tied to the fact that Lula beat Trump's friend," former U.S. trade official Brad Setser told Reuters, and it "shows the danger of having tariffs that are under the unilateral control of one man." This is "about punishment, not trade," said Bloomberg, and Trump is emboldened by "the lack of any serious negative effects" so far from his trade war.
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What next?
Brazil imported over $42 billion in goods to the U.S. last year, from crude oil to steel and coffee, but this 50% blanket tariff threatens the "potential collapse of a trading relationship with one of the few countries where the U.S. runs a trade surplus," said Axios. Trump's letter said the new rate would take effect on August 1.
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