[Global Times – Report by Bai Yunyi] On July 9th, U.S. President Donald Trump posted a letter to Brazilian President Jair Bolsonaro on the social media platform “Reality Social,” stating that he would impose a 50% tariff on all goods imported from Brazil starting August 1st, marking one of the highest tariffs announced by the United States to date. In response, Bolsonaro responded on the evening of the 9th, stating that he would counter any unilateral measures to raise tariffs based on the Economic Compensation Act of Brazil and emphasized that Brazil is a sovereign nation and will not accept threats or interference from anyone.
Although in the letter, Trump claimed that the trade relationship between the United States and Brazil was “very unfair,” in reality, Brazil is an exception among all tax subjects in the United States: in 2024, the bilateral trade volume between the U.S. and Brazil reached $92 billion, with the U.S. achieving a rare trade surplus of $7.4 billion. According to Brazilian President Bolsonaro, over the past 15 years, the cumulative trade surplus in goods and services trade between the U.S. and Brazil has exceeded $410 billion. So, why does the United States take such strong action against Brazil at this time? What impact will the new round of tariff threats have on both countries and the global community?
The reasons behind the United States’ actions towards Brazil may be three deep-seated ones.
According to reports from American media, the latest decision on tariffs was directly linked to Brazil’s judicial trial of former President Jair Bolsonaro, demanding that Brazil cease its investigation into former President Bolsonaro and accusing Brazil of malicious attacks on free elections. Media public statements indicated that Bolsonaro is facing trial for attempting a coup after losing the election in 2022. Trump also warned that if Brazil were to increase tariffs as a countermeasure, the U.S. would once again raise tariff rates.
Zhou Zhiwei, Director of the International Relations Research Office at the Latin American Studies Institute of the Chinese Academy of Social Sciences, in an interview with “Global Times” on October 10th, stated that the latest U.S. tariff threat to Brazil is largely driven by political considerations rather than solely economic ones, reflecting the United States’ intention to interfere in Brazil’s current domestic and foreign policies.
Zhou explained that the Brazilian judicial investigation into former President Jair Bolsonaro might end his eligibility to run for office before 2030, significantly impacting the country’s right-wing political forces. The U.S.’s move aims to pressure Bolsonaro’s camp and maintain high coordination with the Trump administration during Bolsonaro’s tenure.
Wang Youming, a member of the Strategic Advisory Committee of the Innovative Base for the BRICS Group, believes that the U.S. may have deeper political motives behind this action—to influence Brazil’s presidential election in 2026. He noted that Lula narrowly won the last election, and the current conservative faction in the Brazilian Congress remains strong, presenting a “smaller government, larger opposition” scenario. Opposition parties are closely linked with the military and judiciary, making the U.S.’s influence undeniable.
“By creating economic pressure and weakening Lula’s government’s governance capabilities, the U.S. may be deliberately creating a more favorable political environment for Brazil’s right-wing,” he told “Global Times.”
The U.S. tariff threats are also believed to be related to Brazil’s recent stance at the recently concluded BRICS summit in Rio de Janeiro. According to media reports, after the meeting, Lula openly criticized the U.S.’s “tariff stick” when discussing the world’s shift towards a “new global organizational approach.” When talking about BRICS countries, he mentioned they are a group of nations seeking new ways of organizing the world from an economic perspective. “I believe this is why some people feel uneasy about BRICS.”
”
Wang Youming believes that Luiz Inacio Lula da Silva’s remarks at the BRICS summit were the “direct trigger” for the sudden U.S. tariff increase on Brazil. He stated that the current U.S. government has long harbored reservations about the BRICS mechanism, having previously threatened that any country supporting the “anti-American policy” of the BRICS countries would be subject to an additional 10% tariff. Now, it has taken a more direct approach against Brazil, which not only serves as a retaliatory measure against Lula’s personal stance but also reflects the U.S.’s deep anxiety over the rise of the BRICS bloc. Consequently, it seeks to weaken the overall strategic momentum of the BRICS by pressuring Brazil, a significant player within the group.
He also emphasized that this move is related to Lula’s ongoing push towards “de-dollarization” in recent years. During several occasions in the past two years, Lula has repeatedly questioned the dependence on the dollar in international trade and stressed the need for currency settlement, which the U.S. sees as a challenge.
“Trump’s core philosophy is ‘Dollar Dominance, Profit Maximization’, and he cannot tolerate any actions or statements challenging the dominance of the dollar,” he believes. This pressure on Brazil aims to “shock the horses”, warning other countries that dare to propose “de-dollarization” or challenge the dollar’s dominance.
Faced with the threat from the U.S., Brazil finds itself in a dilemma.
Following Trump’s threat of tariffs, the Brazilian real fell nearly 3% against the dollar, and the largest U.S.-listed ETF tracking Brazil’s stock market, the Ameritrade MSCI Brazil ETF, saw a nearly 2% drop in after-hours trading. The American depositary shares of Brazil’s aircraft manufacturer, Embraer, also fell by 9% during after-hours trading. The company is one of Brazil’s key exporters to the U.S., particularly transport equipment, especially aircraft and aircraft parts, accounting for a significant portion of Brazil’s exports to the U.S.
Zhou Zhiwei told the Global Times that if 50% of the tariffs are ultimately implemented, they will undoubtedly have a heavy impact on bilateral trade.
“Imposing a 50% tariff means that most of the trade between Brazil and the United States will no longer be feasible. This would harm the international reputation and economic interests of the United States, as well as have a significant impact on the Brazilian economy.”
Pan Deng, Director of the Latin American Law and Public Policy Research Center at China University of Political Science and Law, told Global Times that Brazil is the main supplier of important agricultural products for the United States, such as coffee, orange juice, and beef. High tariffs would severely impact Brazil’s agriculture. After the announcement, the Brazilian real currency plummeted, and the price of coffee futures soared by 15%, indicating the impact of this news on the Brazilian economy. However, at the same time, if tariffs are implemented, U.S. consumers may face a significant increase in the prices of coffee, orange juice, and other goods, leading to inflationary pressures and public sentiment.
According to Reuters, imposing tariffs on Brazil could have a significant impact on U.S. food prices. The United States is the world’s largest consumer of coffee, with about one-third of its consumption coming from Brazil, which is also the world’s largest coffee-producing country. Industry data shows that Brazil exports nearly 8 million bags of coffee to the United States each year. More than half of the orange juice sold in the United States comes from Brazil, accounting for 80% of global orange juice trade. Additionally, Brazil sells sugar, beef, and ethanol to the United States.
On the evening of the 9th local time, Brazilian President Lula responded to the threat of U.S. tariffs by stating that he would counter any unilateral measures to raise tariffs according to the Brazil-to-Economic Reciprocity Act. The Economic Mutual Relations Act took effect in April 2025, stipulating that in response to unilateral measures that adversely affect Brazil’s international competitiveness, related commercial privileges, investment, and intellectual property rights obligations can be suspended.
In this regard, Wang Youming believes that although Brazil has expressed its intention to counterbalance unilaterally, its policy space might be limited.
The United States is the largest source of investment for Brazil, having a profound impact on various sectors including the Brazilian Congress, military, and judicial system. Despite being larger in trade with China, Brazil maintains closer ties with the United States in terms of institutional and capital levels, making its retaliatory measures difficult to achieve true reciprocity.
However, Zhou Zhiwei believes that there remains much uncertainty regarding whether the tariffs mentioned above will be implemented on August 1st. He stated that the actions by the United States not only severely violate the international norm of “non-interference in the internal affairs of other countries” but also further damage America’s international reputation.
“Brazil is the second-largest trading partner of the United States globally, and it is also the second-largest trading partner of the United States in Latin America. Brazil is one of the few countries where the United States has a trade surplus. Under this economic and trade dependence relationship, imposing punitive tariffs lacks practical support,” he expressed.
Pan Deng told Global Times that facing the threat from the United States, the Brazilian government faces a dilemma: accepting the United States’ demands would be difficult to explain domestically, while imposing tariffs would cause severe economic impact. How Brazil will respond substantively to the United States will test Lula’s political wisdom greatly.
“A fact that cannot change is that Brazil’s exports to the United States will face considerable pressure in the coming period. The Brazilian government must accelerate trade cooperation with the BRICS countries to reduce its reliance on the American market. It can be anticipated that Brasília will accelerate the sale of soybeans, meat, and other goods to the Chinese market, while calling for BRICS countries to strengthen their currency settlement cooperation,” he believes.
“Brazil-US relations may escalate into a political-economic complex confrontation.”
“Brazil-US relations continue to deteriorate,” commented Devdiscourse on the 10th news portal. The diplomatic relationship between Brazil and the United States is experiencing an escalation of tensions. On the 9th, the Brazilian Foreign Ministry summoned the temporary representative of the U.S. Embassy in Brazil to protest against supportive statements made by the U.S. about Bolsonaro’s case.
In the future, what will be the trajectory of the relationship between Brazil and the United States, and how will it impact the global arena? Zhou Zhiwei, analyzing for Global Times, believes that in recent years, the “structural contradictions” within the US-Brazil relationship have been rising. This is evident at two levels: on the regional level, Latin American countries generally seek diplomatic autonomy, while the US continues to attempt to maintain its hegemony in the Western Hemisphere; on the global level, emerging nations seek to push for global governance reforms, while the US aims to uphold its existing hegemonic order, with fundamentally divergent demands.
“Trump’s alignment with the global far-right forces will further exacerbate the tensions between Brazil and the US, especially when Brazil is governed by a leftist party,” he stated. “The actions taken by the US essentially represent an ostracism of the Southern Global Strategic Cooperation Mechanism, attempting both to interfere in Brazil’s internal affairs and to challenge its positions and efforts in regional integration, multilateral cooperation, and South-South cooperation.”
Pan Deng believes that if the trade war between Brazil and the US continues to escalate, the current relationship between the two might evolve into a “political-economic hybrid confrontation.” Brazil will not easily yield but may shift towards emerging markets such as the BRICS group.
“We cannot overlook Brazil’s status as a regional power, a major emerging country, and a key promoter of de-dollarization,” he remarked. The conflict between Brazil and the US will not only affect bilateral relations but also redefine the global trade landscape. On one hand, the confrontation between the US and the Southern Hemisphere could face escalation and have a profound impact on the global supply chain; on the other hand, trends towards de-dollarization and multipolarity could accelerate.