What’s behind Trump’s 50 percent tariff for Brazil despite trade surplus?

United States President Donald Trump has threatened Brazil with a 50 percent tariff, citing the transgression charges against its erstwhile president and his governmental state Jair Bolsonaro, who is accused of plotting a coup.

In a missive to Luiz Inacio Lula da Silva, Brazil’s existent president, Trump said connected Wednesday that the attraction of Bolsonaro, who refused to publically concede the presidential election that helium mislaid to Lula successful 2022, “is an planetary disgrace”.

The missive was 1 of 22 tariff notices Trump sent this week to assorted countries. On Monday, the president extended a pause connected his sweeping planetary tariffs from Wednesday to August 1.

For the astir part, Trump says helium is trying to rebalance ample trading deficits, whereby the US imports much from a state than it exports there.

But the US has a commercialized surplus with Brazil, and the tariff threatened against South America’s largest system was higher than those received by different countries, which person mostly fallen successful the scope of 25 to 40 percent.

The escalation successful tensions betwixt the US and Brazil came arsenic Lula hosted representatives from China, Russia, Iran and different nations for a BRICS summit of emerging economies successful Rio de Janeiro this week.

Leaders attending the acme criticised Trump’s tariffs and the caller US and Israeli bombing of Iran, drafting threats from Trump of a 10 percent further tariff for “anti-American” BRICS-aligned countries.

What has Trump announced successful narration to Brazil?

Trump has continued to people letters informing US trading partners of tariffs planned to statesman connected August 1 if they can’t scope commercialized deals with his authorities earlier that. So far, helium has sent 22 letters to heads of state. More could inactive come.

While the letters person mostly denounced commercialized betwixt those countries and the US arsenic “far from reciprocal”, Trump’s missive to Lula was stronger.

He wrote that “due successful portion to Brazil’s insidious attacks connected Free Elections, and the cardinal Free Speech Rights of Americans”, helium planned to levy a 50 percent taxation connected Brazilian goods exported to the US.

“Please recognize that the 50 percent fig is acold little than what is needed to person the Level Playing Field we indispensable person with your Country,” Trump added. “And it is indispensable to person this to rectify the sedate injustices of the existent regime.”

He said: “The mode that Brazil has treated erstwhile President Bolsonaro, a Highly Respected Leader passim the World during his term, including by the United States, is an planetary disgrace.”

How has Brazil responded?

Lula promised to deed backmost with tariffs of his ain if Trump follows done with his threat.

“Brazil is simply a sovereign federation with autarkic institutions and volition not judge immoderate signifier of tutelage,” Lula said successful a station connected X.

He added that the transgression lawsuit against Bolsonaro, who challenged the outcome of Brazil’s 2022 election, is simply a substance solely for the justness strategy and “not taxable to interference oregon threat”.

Lula won a choky statesmanlike contention against Bolsonaro successful 2022 [Adriano Machado/Reuters]

Why is Trump targeting Brazil erstwhile the US has a commercialized surplus?

According to the Office of the US Trade Representative, the US imported $42.3bn of goods from Brazil successful 2024 and exported $49.7bn.

In short, Brazil’s purchases from the US amounted to astir $7.4bn much than US purchases from Brazil.

Ever since the announcement of his “Liberation Day” tariffs, connected April 2, Trump has consistently stated his tendency to trim America’s commercialized deficits with its trading partners.

In Trump’s view, shortage countries, specified arsenic the US, import goods that could person been produced astatine home, harming home employment and economical maturation successful the process.

However, “Brazil has historically tally a tiny commercialized shortage with the US”, said Elizabeth Johnson, an economical expert astatine TS Lombard, a strategy and governmental probe firm. “It is precise overmuch political. … It is portion of the Bolsonaro family’s effort to get Trump to measurement successful connected the ongoing trial of Jair Bolsonaro.”

Indeed, this is not the archetypal clip Trump has utilized the menace of tariffs to effort to change different countries’ home argumentation decisions.

Since returning to bureau successful January, helium has threatened a 25 percent tariff connected Colombian goods and said helium would treble that if the state refused to judge deportees from the US. Colombia yet accepted his terms.

What commercialized does the US bash with Brazil?

In 2023, the equilibrium of commercialized (imports positive exports) betwixt the US and Brazil amounted to $104bn, making Brazil the US’s 15th largest trading partner.

Top US exports to Brazil past twelvemonth included craft and spacecraft (amounting to astir $7bn), fossil fuels ($9bn) and concern machinery specified arsenic atomic reactors and electrical instrumentality (roughly $10bn), according to US Census Bureau data.

Brazil’s exports to the US successful 2023 were led by crude lipid and fossil fuels (about $8.8bn), robust and alloy products ($5bn) and soya beans ($3.3bn).

What interaction could a 50 percent tariff person connected Brazil’s economy?

It could severely wounded companies highly exposed to the US market. In particular, firms successful the basal metals and cultivation sectors could beryllium severely hit.

According to Johnson, Trump’s tariff menace could beryllium a resistance connected economical maturation due to the fact that the US is Brazil’s 2nd largest export marketplace aft China.

Indeed, Goldman Sachs has calculated that Brazil’s exports to the US correspond 2 percent of its gross home merchandise and Trump’s tariffs could chopped its economical maturation by 0.3 to 0.4 percent points.

What interaction could this person connected the US economy?

If the tariffs are implemented, US firms that bargain Brazilian goods would astir apt person to find alternate sources for those products, and this could instrumentality time.

In the meantime, “the semifinished alloy products from Brazil utilized successful American manufacturing mean [that higher tariffs would be] a negative,” Johnson told Al Jazeera.

In addition, “beef, orangish juice, coffee” and different workplace products travelling from Brazil into the US would go overmuch much expensive, she said.

On the different hand, Johnson suggested, “There’s country for Trump to people a triumph with Brazil by allowing much ethanol exports into the US, which would assistance [American] farmers.”

What charges is Bolsonaro facing successful Brazil?

Bolsonaro, who was president of Brazil from 2019 to 2023, refused to concede his statesmanlike predetermination nonaccomplishment to his left-wing rival successful 2022.

Bolsonaro raised questions astir the accuracy of the predetermination result, claiming that immoderate physics voting machines had been faulty.

Shortly aft Lula took bureau successful January 2023, thousands of Bolsonaro’s supporters angered implicit the predetermination effect stormed the statesmanlike palace, Congress and the Supreme Court successful the capital, Brasilia.

Now, Bolsonaro is facing transgression charges for allegedly plotting a coup and for alleged actions helium took to overturn the 2022 predetermination result.

Bolsonaro and 33 different radical were charged this year, and the ex-president’s lawsuit is being heard by the Supreme Court. He could look 40 years successful situation if recovered guilty.

Bolsonaro has denied immoderate wrongdoing and has framed the proceedings arsenic a politically motivated attack.

Trump, who besides falsely claimed helium had beaten Joe Biden successful the 2020 statesmanlike election, had faced criminal charges related to seeking to overturn that election. His supporters besides stormed the US Capitol earlier Biden took office, seeking to halt the certification of the predetermination results.

Trump has highlighted what helium regards arsenic parallels betwixt himself and Bolsonaro. On Monday, helium wrote connected societal media that helium empathised with what was happening to Bolsonaro: “It happened to me, times 10.”

Which different countries were notified of caller tariffs?

Other than Brazil, recipients of tariff letters connected Wednesday included the Philippines, Moldova, Sri Lanka, Brunei, Libya, Algeria and Iraq. They were notified of tariffs arsenic precocious arsenic 30 percent.

The rates Trump said would beryllium imposed connected Sri Lanka, Moldova, Iraq and Libya were little than those helium initially announced successful aboriginal April.

Tariffs connected goods from the Philippines and Brunei were higher. The complaint for goods from Algeria remained the same.

Trump has said companies that determination accumulation to the US volition beryllium exempt from tariffs. But helium besides warned that if countries retaliate, they could look adjacent higher US duties.

The US and its largest trading partners person been negotiating commercialized deals since Trump announced the tariffs. But truthful far, lone Vietnam and the United Kingdom person reached caller deals portion a partial agreement has been reached with China.

More recently, Trump medication officials person indicated that deals with India and the European Union whitethorn beryllium imminent.