Brazil to retaliate over Trump’s 50 per cent revenge tariff

In a letter to Rio de Janeiro, Donald Trump cited legal action against its former President Jair Bolsonaro and US tech firms as justification for the levies.

Brazil's President Luiz Inacio Lula da Silva walks among presidential guards. Picture; AFP.

President Luiz Inácio Lula da Silva of Brazil has said his country will reciprocate after Donald Trump announced the US would charge a 50 per cent tariff on Brazilian goods starting on August 1.

In a letter to the Latin American country’s government Mr Trump cited legal action against its former President Jair Bolsonaro and US tech firms as justification for the levies.

In response, da Silva said the attempted coup charges against Bolsonaro “is the sole responsibility of the Brazilian Judiciary.”

The 50 per cent tariff is the highest level announced so far in Trump’s flurry of letters to world leaders this week, which were sent after he pushed back the deadline to impose his so-called reciprocal tariffs to Aug. 1. They had previously been set to take effect on Wednesday, after being paused since April.

Bolsonaro, the leader of Brazil’s political right and a longtime Trump ally, is currently on trial in Brazil over an alleged coup attempt against the sitting government of President Luiz Inácio Lula da Silva, a legal case that Trump sharply criticised in his tariff letter to da Silva.

“The way that Brazil has treated former President Bolsonaro, a Highly Respected Leader throughout the World during his Term, including by the United States, is an international disgrace,” Trump said in the letter, posted to his Truth Social platform.

The move comes after Trump wrote a lengthy message in support of Bolsonaro on Monday on Truth Social, calling the criminal case a politically motivated witch hunt against the conservative leader by Brazil’s Supreme Court, and drawing parallels with his own legal problems.

“This is nothing more, or less, than an attack on a political opponent – Something I know much about … LEAVE BOLSONARO ALONE!” Trump wrote.

Bolsonaro told The Wall Street Journal in November last year that he was banking on Trump to use economic sanctions against da Silva’s government to help him return to power in Brazil, where he also faces an electoral ban that prevents him from running for office until 2030.

Trump’s administration has been locked in a dispute with Brazil’s Supreme Court over moves by Justice Alexandre de Moraes to stamp out what he says is hate speech by Brazil’s far-right, both at home and in the US.

Elon Musk labelled de Moraes a dictator last year after the justice shut down his X platform for more than a month in the country. Trump’s media company, the parent of Truth Social, and video-sharing platform Rumble also sued de Moraes earlier this year, accusing him of illegally censoring political discourse on social media in the US.

Brazilian President da Silva and de Moraes have said they would do what it takes to protect the country’s young democracy after thousands of supporters of Bolsonaro stormed the country capital in violent riots on Jan. 8, 2023, drawing comparisons with the Jan. 6, 2021, attack on the Capitol in the US.

“The defence of democracy in Brazil is a matter for Brazilians,” da Silva said Monday after Trump’s message of support for Bolsonaro. “We are a sovereign country. We do not accept interference or tutelage from anyone.”

The tariff levels for Brazil could ultimately go higher, according to Wednesday’s letter. In response to Brazilian legal cases and fines on US tech firms, Trump wrote that he has directed USTR to open a tariff investigation into unfair trade practices in Brazil under Section 301 of the Trade Act of 1974. That could mean additional levies on top of the so-called reciprocal rate of 50 per cent.

The 50 per cent tariff would be a major disruption to $92 billion trade in goods with Brazil – a country with which the US ran a trade surplus of $7.4 billion in 2024, according to the US Trade Representative’s office. Brazil is the US’s 16th largest trading partner, according to the Census Bureau, and the US exported $49.7 billion to the country in 2024, while importing $42.3 billion.

Brazil’s currency, the real, lost more than 2 per cent against the dollar late Wednesday after Trump’s announcement.

Trump and his team have focused on reducing trade deficits in negotiations with many other nations, and his letter to Brazil references trade deficits as a national security threat, despite the fact that the US runs a surplus with the country.

“Please understand that these Tariffs are necessary to correct the many years of Brazil’s Tariff, and Non-Tariff, Policies and Trade Barriers, causing these unsustainable Trade Deficits Against the United States,” he wrote.

But much of his letter to Brazil focused on the treatment of Bolsonaro – who he befriended during his first term as both heads of state sought to push their nations politically to the right – and US tech firms. The tariffs, he wrote, would be based on Brazil’s “insidious attacks on Free Elections” and the “fundamental Free Speech Rights of Americans,” referring to US-based social-media platforms.

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