Brazil had been set to face the minimum 10% levy under the so-called “reciprocal” tariffs Trump originally unveiled in April. (Dado Galdieri/Bloomberg)
Donald Trump said July 9 he would impose 50% tariffs on Brazil, a dramatic increase that followed the U.S. leader’s intense criticism of the foreign and domestic policies of leftist President Luiz Inacio Lula da Silva.
In a letter posted to his social media account, Trump said he was making the change “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans.”
The Brazilian real slumped as much as 2.9% against the U.S. dollar following the announcement, while the $5.35 billion iShares MSCI Brazil ETF — the largest U.S.-listed exchange-traded fund tracking the nation’s equities — was down 1.8% in postmarket trading.
Brazil had been set to face the minimum 10% levy under the so-called “reciprocal” tariffs Trump originally unveiled in April. The letter was the latest of more than 20 notices posted by Trump in recent days, the first substantial upward revision from previously announced rates, and the first sent to a country that hadn’t already been a target for an increase — suggesting particular frustration on Trump’s part.
At an event earlier at the White House, Trump complained that Brazil had “been not good to us.” His decision on Brazil, Trump said, was “based on very, very substantial facts, and also past history.”
(Bloomberg)
The announcement came just days after Trump threatened to impose additional tariffs on members of the BRICS bloc of emerging market nations over its supposed “Anti-American policies” during the group’s leaders summit in Rio de Janeiro.
BRICS leaders hosted by Lula criticized trade-distorting tariff policies and military strikes on Iran in their official declaration, moves that put them at odds with Trump even as they shied away from direct challenges to the U.S.
After making little mention of Brazil during the initial months of his term, Trump also rushed to the defense of Jair Bolsonaro on July 7, accusing the South American nation of politically persecuting the right-wing former president who is facing a looming trial on charges that he attempted a coup.
In the letter, Trump reiterated his call for authorities to drop charges against Bolsonaro over an alleged coup attempt.
“This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!” Trump wrote.
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Lula fired back at the end of the BRICS summit on July 7, telling Trump to mind his own business regarding Brazilian affairs and calling the U.S. leader “irresponsible for threatening tariffs on social media.” He also urged world leaders to find ways to reduce international trade’s reliance on the dollar.
Ahead of the announcement, Vice President Geraldo Alckmin said he saw no reason for a tariff increase because the U.S. runs a trade surplus with Brazil.
“Any such measure targeting Brazil would be unfair and would actually harm the U.S. economy,” Alckmin, who also serves as the country’s minister of industry and trade, said. He added that Brazil won’t “change our tone” as it continues negotiations over steel tariffs and other levies.
Trump earlier this week maintained his initial tariff rate on South Africa, another BRICS member. The bloc also includes original members Russia, India and China, along with recent additions Ethiopia, Egypt, Iran, Indonesia and the United Arab Emirates.
