Donald Trump Declares He Will Impose a 50% Tax on Goods from Brazil

The President of America, Donald Trump, has just announced a 50% import tax on goods from Brazil, in a move that escalates serious tensions between Washington and Brasília. The reason Mr. Trump provided is to respond to what he calls a "sneaky attack" on the freedom of speech and free elections of the American people. The announcement was made by Donald Trump on the Truth Social platform on July 9, in which he fiercely attacked the administration of Brazilian President Luiz Inácio Lula da Silva, particularly regarding the handling of former President Jair Bolsonaro – who was once a close ally of Donald Trump. Trump called Bolsonaro "a globally respected leader during his term" and described the prosecution against him related to the coup attempt as a "witch hunt" that needs to be stopped immediately. He asserted that the 50% tax will take effect from August 1. In addition, Mr. Trump accused the Brazilian Supreme Court of issuing hundreds of "secret and illegal" censorship orders against American social media platforms, even threatening to impose millions of dollars in fines and expel these companies from Brazil. Market and government reaction in Brazil Right after Mr. Trump's statement, the Brazilian real plummeted sharply, losing 2.3% of its value and falling to R$5.58 per 1 USD in the afternoon trading session in New York. At the same time, Brazil's Bovespa stock index also dropped 2.3% in the evening trading session in São Paulo. In response to Trump's threats, President Lula da Silva declared that Brazil is a sovereign nation, capable of managing its own institutions, and will not allow anyone to "control" them. He dismissed accusations from Trump, asserting that freedom of speech does not equate to allowing violent actions or incitement to overthrow. President Lula emphasized that all companies, whether Brazilian or foreign, must comply with Brazilian law if they wish to conduct business in the country. Vice President Alckmin criticized Trump's tax policy. The Vice President and Minister of Commerce of Brazil, Mr. Geraldo Alckmin, has publicly criticized Trump's plan to impose a 50% tax, calling it an "inappropriate" action. Speaking in Brasília, Mr. Alckmin stated that there is no valid reason for America to raise taxes on Brazilian goods, especially when America has a trade surplus with this South American country. According to the Office of the United States Trade Representative, America recorded a surplus of 7.4 billion USD in goods trade with Brazil in 2024. Mr. Alckmin warned that tax increases could have adverse effects on the American economy, especially in the steel industry. Brazil is the third largest customer purchasing coal used in steel production in America. This country typically produces semi-finished products and exports them to America for completion, so imposing taxes will only increase the supply chain costs for American businesses.

America expands the tariff front, Brazil is a prominent target The letter sent to the Brazilian government is the 8th letter in a series of letters that Trump released on July 9, as part of a campaign to pressure over 22 countries to force them to negotiate or face heavy tariffs. Earlier that day, Trump had imposed tariffs of 25-30% on goods from countries such as Algeria, Brunei, Iraq, Libya, Moldova, the Philippines, and Sri Lanka. Countries like Japan and South Korea are also in the crosshairs with a threat of a 25% tariff. Notably, the letter sent to Brazil has a much harsher and firmer tone than other letters, although it still repeats the message of "strong commitment in trade relations with America." Trump's targeting of Brazil is also seen as a continuation of his previous threat to impose a 10% tariff on all countries in the BRICS bloc – a group of which Brazil is a founding member. He has previously criticized BRICS as an alliance promoting "anti-American" policies.

Diplomatic tensions escalate Tensions between America and Brazil are not limited to trade issues. Earlier in May, U.S. Secretary of State Marco Rubio stated that Washington is considering the possibility of sanctioning Brazilian Supreme Court Justice Alexandre de Moraes – who is accused of ordering the closure of social media accounts that are alleged to have spread misinformation. Also on July 9, the Brazilian Ministry of Foreign Affairs summoned the U.S. Chargé d'Affaires after the U.S. Embassy issued a statement supporting Jair Bolsonaro. The Brazilian Supreme Court has not yet commented on the incident.