Trump’s Brazilian tariffs are more about political revenge: Analysis

Brazil believes it has gently gotten out of the way in terms of Trump’s tariffs.

In April, U.S. President Donald Trump announced that imports of Brazilian goods to the United States would face 10% tariffs – the lowest base interest rate is applicable to most countries.

Now, with the 90-day pause of tariffs on the United States and other targeted U.S. tariffs to expire, Trump has raised Brazil’s interest rates to 50%, which could launch a trade war with Latin America’s largest economy, which sells large quantities of beef, coffee, coffee, steel and other products to the United States.

Wednesday’s announcement means that Brazil will face one of the world’s highest tariff rates, at least so far. However, this new policy has nothing to do with trade.

Earlier this month, Trump claimed that the United States and Brazil had encountered a trade deficit. In fact, it operates a multi-million dollar surplus, which means the U.S. sells more to Brazil than it buys.

This new tariff rate is not about illuminating the business competition environment. This is political and part of a growing dispute between the United States and Brazil.

President Trump has shaped these tariffs as a retaliation against former Brazilian President Jair Bolsonaro, prosecuting his allies.

Bolsonaro, who lost the 2022 presidential election, was facing trials on alleged coups when his supporters stormed into the government building in Brasilia. The case includes claims of the plot of killing President Luis Inacio Lula da Silva who won the game.

Bolsonaro denied the allegations, and Trump slammed them as “witch hunting.”

Much of the outrage in the U.S. government is directed at Brazil’s Supreme Court Justice Alexandre de Moraes, who investigates Bolsonaro.

In announcing the tariff rate hike, the White House also accused Brazil of “the right to freedom of speech for Americans” and the so-called Brazilian as a politically motivated action to persecute, intimidate, harass, censor, censor and prosecute.

The “action” and “freedom of speech rights” mentioned in the White House statement may refer to Moras’s previous court orders requiring some social media companies to close accounts related to the former president, Moraes is accused of spreading harmful false information.

Moraes is known in Brazil for targeting misinformation.

Last year, he temporarily shut down Elon Musk’s X in one of the platform’s largest markets for ordering a suspension of dozens of accounts to spread false information, which Musk calls “censorship.”

In Brazil, some people are advocates of democracy. Others, in Musk’s words, Bolsonro’s view is that he is a “dictator” or even a “dictator.”

Earlier this year, Trump’s own media group (his truth social platform) sued Supreme Court judges over censorship allegations.

Shortly before the tariffs were announced, the United States also imposed sanctions on Moras and issued them to him and his family through a visa ban.

Some analysts believe that the maintenance of social media companies is a trade issue in itself.

Fabio Andrade, a political scientist and professor of international relations at Brazil’s School of Advanced Advertising and Marketing, believes that the motivation for tariffs is “not only” politically.

He said that big tech companies are important in the U.S. economy and are “critical to raising for Trump’s campaign” and could now face substantial cost increases due to increased regulations.

But these new U.S. tariffs and sanctions policies are also partly the result of a long campaign by former president’s son Eduardo Bolsonaro, who has spent months lobbying U.S. officials to represent his father in the past few months.

Moraes ordered federal MP Eduardo to be investigated for alleged obstruction of justice and directed Jair Bolsonaro to wear an electronic ankle tag before the trial to comply with a curfew to avoid social media and avoid contact with her son.

To support his friends, Trump has slapped Brasilia with these tariffs, sanctions and visa bans – all aimed at putting pressure on Brazilian authorities to back down on criminal lawsuits against Bolsonaro.

So far, they don’t seem to work and may harm both countries during this time.

Left President Lula repeatedly rejected the move and regarded it as a foreign intervention, defending the Supreme Court’s independence as judicial independence, and urged the United States to negotiate.

“The U.S. government’s intervention in Brazil’s justice is unacceptable,” Lula said Wednesday, adding that while the country is still in trade negotiations with the United States, it is preparing measures to “protect Brazilian workers, companies and families.”

Relations remain cold – Lula and Trump never even exchanged phone calls.

On the Benefits of Lula, he responded to Trump’s tariff threat, and like Canada’s Mark Carney, he enjoyed a poll at home.

He even wore a blue hat, not unlike Trump’s red “make America great again”, which says “O Brasilé dos brasileiros” or “Brasil belongs to Brazilians.”

In fact, some analysts in Brazil say the tariffs representing Bolsonaro’s collection may backfire, a former president who is currently banned from running again in next year’s presidential election.

Especially because some producers, including those more likely to support Bolsonaro, will be severely affected by the new speed.

Brazil has a huge agricultural business and sells many beef, oil and steel products to the United States.

The United States has obtained about a third of its coffee and more than half of its orange juice from Brazil, including through major brands such as Tropicana and Starbucks.

Currently, some items – including a lot of oil, orange juice and some airplane parts – have been temporarily excluded from the tariffs.

But as companies pass on higher costs to consumers, the new 50% tariff rate (which will take effect in October) could make other goods more expensive, and Brazilian producers will have to absorb some higher prices themselves.

Brazil may seek new buyers around the world, but exporters say that will not offset the short-term impact.

The Brazilian coffee exporters committee Cecafé said the impact on Brazilian roasters and exporters would be “important” and expected prices for Americans to rise, as the United States is Brazil’s largest coffee customer.

Brazilian producers and exporters are developing contingency plans to obtain 50% tariffs. But, those I’m talking about stress that it will be impossible to replace us in the short term.

Cecafé told me that it is not easy for other markets of 8.1 million tons of coffee currently exported to the United States, which requires increasing demand from other countries.

According to Cecafé, new markets opened to Brazil in Asia last year, which imported 19.4% of Brazilian coffee as Arab countries also imported 31.5%, but these growth was not enough to absorb any potential U.S. shortages.

Brazil’s next move is unclear: Will Brasilia and Washington negotiate a new deal like other countries? Or is Brazil retaliate and turn this quarrel into a mutual trade war?

Lula said he would not be intimidated. Trump shows no sign of support. Both are large figures, impressing with supporters who produce supporters from the other end of the political field.

What (and) could go wrong?