Brazilian President Luiz Inácio Lula da Silva has issued a warning that Brazil will impose retaliatory tariffs on the United States if President Donald Trump follows through on his promise to raise import taxes by 50% in relation to Brazil’s ongoing criminal trial against former President Jair Bolsonaro.
In an interview with TV Record, Lula stated, “If there’s no negotiation, the reciprocity law will be put to work. If he charges 50 (% tariffs) from us, we will charge 50 from them. Respect is good. I like to offer mine and I like to receive it.”
Lula’s comments heighten the possibility of a trade war between Brazil and the U.S., reminiscent of the disputes seen between the U.S. and China.
Trump has indicated that he would respond vigorously to any retaliatory tariffs from countries reacting to U.S. policies.
In a joint statement, Brazilian Senate President Sen. Davi Alcolumbre and Chamber of Deputies Speaker Hugo Motta, both moderates who have found themselves at odds with Lula, expressed their support for the reciprocity law, which they believe grants Brazil the authority to shield its sovereignty in trade.
They stated, “We will be ready to act with balance and firmness in defense of our economy, our productive sector, and the protection of Brazilian jobs.”
This latest move by Trump to raise tariffs against Brazil stems from his letter posted on social media, which criticizes the judiciary actions surrounding Bolsonaro’s trial. The letter, which outlines Trump’s intention to impose higher tariffs on Brazilian goods, directly intertwines trade policy with Brazil’s domestic political issues.
Trump’s use of tariffs has extended beyond trade, as seen in his previous actions aimed at combating issues like fentanyl trafficking and negotiating digital service taxes with other countries.
Carlos Melo, a political science professor at Insper University in Sao Paulo, commented on the implications of Trump’s actions, stating, “There’s nothing Lula or Brazil can do about Bolsonaro’s trial. Any change in that would be Brazil’s capitulation.”
Lula instructed his diplomatic team on Thursday to return Trump’s letter if it arrives at the presidential palace in Brasilia, emphasizing Brazil’s sovereignty in handling its judicial matters.
The tension is compounded by the fact that the U.S. maintains a trade surplus with Brazil, undermining Trump’s rationale for escalating tariffs based on the assertion that the trade deficit constitutes a national crisis.
According to a staff member of Brazil’s foreign ministry, ongoing trade negotiations, which had been previously initiated in the wake of Trump’s initial tariffs in April, are now in limbo.
Some officials within Lula’s administration believe that Trump’s latest tariff threats are indicative of concerns over Brazil’s expanding ties with other Southern economies, especially following recent discussions at the BRICS summit held in Rio de Janeiro. During the summit, Lula reiterated plans for alternative currencies to the dollar for international transactions, a subject that Kuranga Trump has vocally opposed in the past.
Gleisi Hoffmann, Brazil’s institutional relations minister, remarked, “Trump was never worried about democracy anywhere, much less with Bolsonaro’s destiny.”
The political landscape in Brazil is shifting, as Trump’s interference has sparked a sense of unity that was previously lacking in a politically fragmented nation. While some Bolsonaro allies have speculated that Lula’s criticisms may have angered Trump, others advocate for a careful approach to negotiations with the U.S.
An editorial from Daily O Estado de S. Paulo, a notable critic of Lula, characterized Trump’s actions against the Brazilian government as “a mafia thing” while also acknowledging that Lula’s response was appropriate, marking a rare alignment from the paper.
Analysts are viewing Trump’s push as a potential double-edged sword; while it may hinder Bolsonaro’s credibility during his trial, it could simultaneously bolster Lula’s position, especially as he contends with dwindling popularity ahead of his reelection campaign.
Recent developments in Canada, where voters elected Mark Carney as prime minister amid growing discontent with Trump’s aggression, suggest that such tariff threats may create a backlash against Trump’s policies not only in Brazil but across the Western Hemisphere.
Andre Pagliarini, a history and international studies professor at Louisiana State University, noted the significance of the situation: “The reaction of a lot of people is that this is a political gift to Lula.”
Political consultant Thomas Traumann characterized Trump’s maneuver as “a game changer” heading into next year’s elections, stating, “Trump put Lula back in the game. This gives Lula a narrative, puts Bolsonaro as the guilty part for any economic problems.”
Further complicating the legal landscape, the U.S. Court of International Trade ruled in May against Trump’s tariff imposition, indicating that he overstepped his authority by declaring an emergency without congressional approval. This ruling is currently under appeal by the Trump administration.
Opponents of Trump’s policies have responded by framing his actions as an illegal effort to manipulate economic conditions for personal gain, with Democratic Senator Ron Wyden of Oregon arguing that it is an unconstitutional exertion of power.
Despite claims from Trump’s administration that the tariffs will have a minimal impact on the U.S. economy, concerns persist regarding the long-term ramifications for domestic inflation and economic growth. Many businesses have previously stockpiled imports in anticipation of tariff increases, leaving uncertainty about future consumer price impacts once existing inventories are depleted.
In Brazil, the tension surrounding Bolsonaro’s trial continues to loom large, with various media reports indicating that fears are mounting among lawmakers and judicial officials regarding the potential for the former president to seek refuge in the U.S. should he be convicted.
Lawmaker Eduardo Bolsonaro, the son of the former president, notably relocated to the U.S. in March and has encouraged his supporters on social media to express gratitude toward Trump.
In Lula’s latest remarks, he pointedly stated that the elder Bolsonaro should bear the consequences of his decisions that have brought about Trump’s tariff threat.
He concluded, “His son went there to make up Trump’s mind, then he (Trump) writes a letter to speak about a case that is in the hands of the Supreme Court. A case that is not a political trial. What is under investigation is the evidence of the case.”
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