Trump proposes 50% tariff on Brazil

US President Trump announced on July 9 that a new 50% reciprocal tariff rate will be applied to Brazil from August 1. It is five times the original rate. The US expressed dissatisfaction with the Lula government and demanded that the Brazilian government cancel measures to combat false information and stop the trial of former President Bolsonaro, who has a close relationship with President Trump. There are 8 countries that announced new tariffs on the 9th.

Trump published a letter on his social networking site to inform 8 countries of the new reciprocal tariff rate. The Philippines is 20%, Brunei and Moldova are 25%. Sri Lanka, Algeria, Iraq and Libya are 30%. Brazil’s 50% stands out.

Trump first published a letter to 14 countries including Japan and South Korea on the 7th, stating that tariffs will be imposed at the new rate on August 1. Trump said on social media that this schedule “will not change.” The letter to Brazil was published on his social network at 9:00 pm Eastern Time on the 9th (early morning of the 10th Beijing Time).

Because the United States has a slight trade surplus with Brazil, when the Trump administration announced the reciprocal tariffs in April, the tax rate it proposed to Brazil was only 10% of the basic rate.

In the letter, Trump said that the Brazilian government’s digital-related policies are inappropriately attacking American companies and will instruct the Office of the United States Trade Representative (USTR) to conduct an investigation under Section 301 of the Trade Act.

Based on the results of the investigation, the Trump administration may impose more retaliatory tariffs on Brazil on the basis of the 50% reciprocal tariff. The Brazilian government held an emergency meeting on the 9th after receiving Trump’s letter.

Confrontation around the former president of Brazil

In the letter, Trump said that Brazil’s trial of former President Bolsonaro was “a witch hunt that must be stopped immediately.” Bolsonaro was charged with planning a coup and other crimes.

On the 7th, Trump also posted on his social networking site that “don’t do anything to Bolsonaro” and advocated that Brazil needs to hold a general election.

The Brazilian presidential palace strongly opposed Trump, saying “we are a sovereign country and do not accept surveillance.” In the presidency statement of the BRICS summit held on the 7th and 8th, Lula also said “Don’t talk about our affairs”, and the conflict between the two sides intensified.

In his letter, Trump also criticized Brazil’s countermeasures to combat false information, saying “this is an illegal censorship of American social media.”

The Brazilian Supreme Court requires the deletion of accounts judged harmful for spreading false information in 2024. Because of disobeying the order, X (formerly Twitter) was banned from use in Brazil for one month. The accounts requested to be deleted are mainly supporters of Bolsonaro in Brazil.

Trump expressed opposition to Brazil’s approach. The operating company of Trump’s social networking site “Truth Social” is fighting a court battle with the Brazilian Supreme Court judges over the deletion of Brazilian right-wing accounts.

Is the final consultation with the European Union being promoted?

Among the major trading partners of the United States, the tariff rates for the European Union (EU), India and Taiwan have not yet been announced. Among them, for the European Union, it has been decided to postpone the letter notifying the new tariff rate. Trump said at the cabinet meeting on the 8th that “(sent to the EU) will be two days later (10th).”

Giving two days is believed to be intended to speed up the final stage of negotiations. Trump said, “The EU has a very good attitude towards the United States,” implying that the United States will actively respond to consultations with the EU.

The United States and the EU originally concentrated on tariff negotiations with the 9th as the deadline. The United States originally planned to impose a 50% tariff on EU imports once the deadline expired.

Bloomberg reported that the EU is trying to reach a temporary agreement with the United States to avoid raising the tax rate on important products such as aircraft and spirits to 50% after August 1.

The EU also asked for a reduction in automobile tariffs. The Wall Street Journal and other reports said that it is discussing with the United States measures to reduce the burden of tariffs on automobiles exported from Europe based on the production of European automakers in the United States.