[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 so far. In response, Bolsonaro responded on the evening of the 9th, stating that he would counter any unilateral measures to raise tariffs with retaliation based on the Economic Compensation Act for Brazil, and emphasized that Brazil is a sovereign country and will not accept threats or interference from anyone.
Despite Trump’s claim in the letter that the trade relationship between the United States and Brazil is “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 U.S. has accumulated a cumulative trade surplus of more than $410 billion in goods and services trade with Brazil. 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 world?
The reasons behind the United States’ actions towards Brazil may be three deep-seated ones
According to reports from American media, the recent decision to link the latest tariffs directly 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, was made public. Media has stated that Bolsonaro is currently facing trial for attempting a coup after being defeated in 2022. Trump also warned that if Brazil were to increase tariffs as a retaliatory measure, 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 concerns, reflecting the United States’ intention to interfere in Brazil’s current domestic and foreign policies.
Zhou Zhiwei explained that Brazil’s ongoing judicial investigation into former President Jair Bolsonaro might end his eligibility to run for office before 2030, significantly impacting the country’s far-right political forces. The U.S.’s move aims to pressure Bolsonaro’s camp, as “Bolsonaro has been highly coordinated with the Trump administration during his 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 Luiz Inacio Lula da Silva narrowly won the last election, and the current Brazilian Congress is still dominated by right-wing forces, presenting a “smaller government, larger opposition” scenario. Opposition parties are closely linked with the military and judicial system, 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.’s tariff threats are also believed to be related to Brazil’s recent statements at the recently concluded BRICS summit in Rio de Janeiro. According to media reports, after the meeting, Lula directly addressed the world’s “big stick” approach to trade, stating, “The world has changed; we don’t need a monarch anymore.” When discussing BRICS countries, he mentioned they are a group of nations seeking new global organizational models from an economic perspective. “I believe this is why some people feel uneasy about BRICS.”
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Wang Youming, analyzing for The Global Times, 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 had long harbored reservations about the BRICS mechanism and had 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 about the rise of the BRICS bloc. Thus, 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 for “de-dollarization” in recent years. During several occasions over the past two years, Lula has repeatedly questioned the dependence on the dollar in international trade, emphasizing the promotion of 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 “set a precedent” and warn other countries bold enough to propose “de-dollarization” or challenge the dollar’s dominance.
Faced with the threat from the U.S., Brazil finds itself in a “double bind.”
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 share of Brazil’s aircraft manufacturer, Embraer, also fell by 9% during after-hours trading, marking one of Brazil’s important export businesses to the U.S., particularly transport equipment, including airplanes and parts thereof.
Zhou Zhiwei told The Global Times that if a 50% tariff rate is ultimately implemented, it 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. Following the announcement, the Brazilian real currency plummeted, and the price of coffee futures soared by 15%, demonstrating the impact of this news on the Brazilian economy. However, at the same time, if tariffs are implemented, U.S. consumers might face a significant increase in the prices of coffee and orange juice, 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 Luiz Inácio 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.
Regarding this, Wang Youming believes that although Brazil has expressed its intention to retaliate with reciprocal measures, its policy space may 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 Brazil’s larger trade volume with China, its closer ties with the United States in terms of institutional and capital levels make it difficult for its retaliatory measures to achieve true reciprocity.
However, Zhou Zhiwei believes that there are many uncertainties 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 the international reputation of the United States.
“Brazil is the second-largest trading partner of the United States globally, and Brazil is also the second-largest trading partner of the United States in Latin America. Brazil is one of the few countries that maintain a trade surplus with the United States. 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 is difficult to explain domestically, while imposing tariffs would cause severe economic impact. How Brazil will respond substantively to the United States will very much test Luiz Inacio Lula’s political wisdom.
“An unchangeable fact is that Brazil’s exports to the United States will face considerable pressure in the coming period. The Brazilian government has no choice but to 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 possibly 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 direction of the relationship between Brazil and the United States, and how will it impact the world? 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 pursue diplomatic autonomy, while the US still attempts to maintain its dominance in the Western Hemisphere; on the global level, emerging nations seek to promote global governance reforms, while the US aims to uphold its existing hegemonic order, with fundamentally divergent demands.
“The Trump administration’s alignment with right-wing global forces will further exacerbate the tensions between Brazil and the US, especially when Brazil is governed by a leftist party,” he stated. “The actions of 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.
“We cannot overlook Brazil’s status as a regional power, a major emerging country, and a significant advocate for 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 Global South could face escalation and have a profound impact on the global supply chain; on the other hand, trends towards de-dollarization and multipolarity are likely to accelerate.