WASHINGTON, D.C. – US President Donald Trump has announced new plans for a 50% tariff on all goods imported from Brazil, set to begin on 1 August 2025. The move, made public in a letter Trump posted on Truth Social, has sparked strong criticism from Brazilian President Luiz Inácio Lula da Silva.
Trump’s statement pointed to the prosecution of former President Jair Bolsonaro and what he called restrictions on US social media firms as the main reasons. Lula quickly promised to match the tariffs if they come into effect, setting the stage for a possible trade fight. The dispute has brought fresh attention to Brazil’s courts, its economy, and its connections with China through the BRICS alliance.
Trump, in a direct letter to Lula, blasted Bolsonaro’s ongoing trial, calling it a “witch hunt” and “a disgrace for the world to see.” Bolsonaro, often compared to Trump, is facing charges for trying to overturn the 2022 election and encouraging unrest in Brasília on 8 January 2023.
Trump, drawing comparisons to his cases at home, demanded the trial stop, claiming Bolsonaro “did nothing wrong but speak up for the people.”
Trump also argued that Brazil’s Supreme Court handed out “hundreds of SECRET and UNLAWFUL Censorship Orders” against American social media companies, threatening them with heavy fines and possible bans. He claimed Brazil’s approach to trade left the US with “huge deficits,” even though government data shows America has had a $410 billion surplus with Brazil over the past 15 years.
Trump linked his tariff plan to the BRICS summit in Rio de Janeiro earlier this month, where leaders spoke against rising tariffs, hinting at his trade measures.
This new 50% tariff would be a jump from the 10% rate he set in April and is part of a broader set of trade actions against 22 countries, including Japan and South Korea. But his letter to Brazil is unusual, as it focuses on political and judicial matters, not just trade.
Lula’s Strong Response
Lula dismissed Trump’s remarks, saying Brazil’s courts are independent and the nation “will not be lectured by anyone.” Speaking in Brasília, he said Bolsonaro’s trial is a matter for the judiciary alone. Lula referred to a new Economic Reciprocity Law, passed this year, which allows Brazil to match foreign tariffs. “If Trump hits us with 50%, we’ll do the same,” Lula told Reuters, signalling a tit-for-tat response.
Brazil’s Foreign Ministry called in the US chargé d’affaires twice, first over the embassy’s support for Bolsonaro and again after Trump’s letter. Lula even instructed his team to send Trump’s letter back if it arrives at the presidential office. Finance Minister Fernando Haddad tried to ease the tension, suggesting that talks could help, but Lula stood firm in public.
Luiz Inácio Lula da Silva is one of Brazil’s most well-known politicians. He grew up in a poor family and led the Workers’ Party to national prominence. Lula served as president from 2003 to 2010, running programmes that reduced poverty and made him popular, especially for the Bolsa Família scheme. Yet his time in office faced corruption scandals, like the “Mensalão” vote-buying case in 2005.
After leaving office, Lula became the focus of the “Car Wash” anti-corruption investigation. He was found guilty in 2017 and jailed for over a decade, but claimed he was being targeted to keep him from running again. In 2019, Brazil’s Supreme Court overturned his conviction, citing bias, which allowed him to run in 2022. Lula won that year’s election by less than one per cent.
Brazil’s Corruption and Court Controversies
Lula’s backers say his cancelled conviction shows Brazil’s courts are political, while others say the legal system is broken. The Car Wash probe revealed widespread corruption among politicians and big businesses, but the use of plea deals and leaked messages caused concerns about how the courts were operating. Justice Alexandre de Moraes, involved in Bolsonaro’s prosecution, has faced claims from Bolsonaro’s supporters that he uses the courts to target their side.
Bolsonaro’s allies in the US have tried to pressure Brazil’s court system, saying Moraes issued “secret” orders to social platforms like X, now owned by Elon Musk. In 2024, Moraes even briefly blocked X over misinformation, before lifting the ban with a hefty fine.
These actions added fuel to claims of overreach, though Brazilian law does require platforms to pull content that encourages violence or attacks the democratic order.
Bolsonaro, president from 2019 to 2022, is fighting several court cases. The main charge accuses him of plotting to overturn the 2022 vote, which led to riots on 8 January 2023.
Federal police have also accused him of planning to kill Lula and a Supreme Court judge, charges he denies. He is further barred from running for office until 2030 for spreading false claims about voting machines, and faces probes for selling official gifts and faking a COVID-19 vaccination record.
Lula insists he has no role in Bolsonaro’s legal problems. “No one is above the law,” he said at this year’s BRICS summit, ignoring Trump’s calls to intervene. Some analysts believe Lula benefits from the trial, removing a major rival ahead of the 2026 election.
Trump’s involvement could backfire by making Bolsonaro look reliant on outside help and sparking nationalist support for Lula.
Brazil’s Closer Ties with China and BRICS
Since returning to power, Lula has built closer links with the BRICS group. This club now includes Egypt and Indonesia and has grown in influence. At this year’s Rio summit, Lula pushed for an alternative currency to the US dollar, which Trump has criticised for years.
Trade with BRICS countries has now passed Brazil’s trade with America and Europe combined, with China as Brazil’s biggest customer. This shift means Brazil relies less on the US and could better handle new tariffs.
Trump accused Brazil of backing “anti-American policies” and saw the BRICS summit’s criticism of tariffs as a direct challenge. He threatened another 10% tariff on all BRICS members in response.
Brazil’s economy has struggled since Lula took office again in 2023. The real lost more than 2% against the dollar after Trump’s tariff threats, and key stocks like Embraer and Petrobras fell. Around 47% of people support Lula, though there is frustration about rising crime and slow growth. While social spending remains, his government has found it hard to turn things around. Brazil’s closed economy offers some protection from global risks, but limits foreign investment.
Corruption is still a problem. Supporters praise Lula’s social programmes, but critics point to new scandals among the Workers’ Party and allies. The fallout from the Car Wash probe still weighs on politics, and claims of mismanagement hang over Lula’s third term. Bolsonaro’s supporters, especially among evangelicals, remain vocal. If the courts convict Bolsonaro, it could only make them more determined.
Impact of the Tariff Dispute
The planned tariffs could hit Brazil’s $40 billion exports to America, harming industries like coffee, meat, and textiles, many tied to Bolsonaro’s core supporters. Still, Brazil’s broader trade links, especially with China, may soften the blow. Lula’s tough stance has united the country in a rare show of solidarity, with even critics like O Estado de S. Paulo calling Trump’s plan “a mafia move.”
For Lula, this conflict could be a boost ahead of the 2026 election. By portraying Trump’s tariffs as an attack on Brazil’s independence, Lula has rallied national pride. “If Lula handles this, his re-election chances just went up,” said Oliver Stuenkel, professor at Fundação Getulio Vargas.
Yet Trump’s move might also weaken Bolsonaro’s case by making him look dependent on foreign backers.
The row between the US and Brazil highlights deeper issues of trade, independence, and how much outside powers can influence national politics. Trump’s use of tariffs as a tool to affect Brazil’s legal process has been compared to strong-arm tactics, with MAGA strategist Steve Bannon calling it “a brave new world.”
Lula has promised to fight back and stand up for Brazil, signalling his refusal to give in to international pressure. The risk of a trade war is real, with potential consequences for both economies and the wider relationship between the US and Latin America.
Source: Reuters
