Trump administration proposes 25% tariffs on Brazil despite US trade surplus | Tariffs
The Trump administration has proposed a 25% tariff on imports from Brazil, accusing the world’s 10th-largest economy of engaging in trade practices that are “unreasonable” and “restrict or burden U.S. commerce.”
Luiz Inácio Lula da Silva said he made the decision “in anger”. The Brazilian president also blamed the US administration’s decision on his opponent in the October elections, senator Flávio Bolsonaro, who visited Washington last week. The senator is the son of former president Jair Bolsonaro, once nicknamed the “Trump of the Tropics” by his allies.
The announcement late Monday followed an investigation by the U.S. trade representative office that accused Brazil of lax anti-corruption enforcement and unfair tariffs of its own, among other things.
The United States has had a surplus in goods trade with Brazil for years.
US trade representative Jamieson Greer said he and Donald Trump had “constructive” talks with Lula and other Brazilian officials. But he said: “We continue to have significant differences in resolving the issues identified in this investigation.”
On Tuesday, Lula cited other reasons for his punitive tariff proposal. It was the first time he called an American official an obstacle to his relations with Trump and once again threatened to retaliate.
“I talked to President Trump for three hours, and this guy Marco Rubio, the head of the State Department, is anti-Latin America,” Lula said. “He is the mortal enemy of Cuba, the mortal enemy of many Latin American countries. I already told Trump he doesn’t like Brazil.”
The U.S. state department did not immediately respond to a request for comment from The Associated Press on Tuesday.
The Brazilian government said in a statement that the Bolsonaros’ dialogue with their American counterparts, which “included the personal participation of Presidents Lula and Trump,” was “sabotaged solely by election and family matters.”
He added that he hoped “the recommendations do not become effective tariffs.”
“However, we emphasize that we will take any measures that can reduce the damage to the national economy, jobs and incomes of Brazilians,” the country’s government said.
Last year, Trump imposed a 50% tariff on Brazil, mainly to protest the prosecution of Jair Bolsonaro for trying to overturn his 2022 election defeat. His relationship with Lula appeared to have improved in early May, when the Brazilian visited the White House.
However, last week, the Trump administration declared two gangs in Brazil as terrorist organizations after Bolsonaro’s visit. Lula opposes the appointment, which analysts say could strengthen his political rival.
Greer’s office has scheduled a public hearing on the proposed tariffs for July 6.
Ryan Majerus, a trade lawyer and partner at King & Spalding, said the administration’s plan does not cover more than half of U.S. imports from Brazil, including aircraft and important minerals.
The Trump administration used Section 301 of the 1974 Trade Act to launch the investigation into Brazil’s business practices.
Bolsonaro traveled to Washington last week to meet with officials following a scandal in his own country in which he admitted taking money from a disgraced banker. The son of former MP Eduardo Bolsonaro was also present at the meeting.
On Tuesday, Trump posted a photo of the Bolsonaros in the Oval Office on his social media site.
In his speech to the residents of the city of Catalão, south of the capital Brasília, Lula said, “These sons of Bolsonaro may be worse than him. They are actually the sellouts of our country. They went there to ask a foreign nation to interfere in Brazil’s affairs.” “They are traitors.”
The US supreme court ruled in February that Trump overstepped his authority by using a different law – the International Emergency Economic Powers Act (IEEPA) of 1977 – to impose sweeping tariffs on US trading partners, including Brazil.
However, the section 301 tariffs have survived legal challenges, and the administration will likely use that authority to impose other tariffs and recoup some of the tax revenue lost due to the high court’s rejection of the IEEPA tariffs.
The Brazilian President said that during his visit to Washington in early May, he gave Trump documents showing that the USA had a trade surplus with Brazil.
Documents released by the U.S. trade representative show that U.S. exports to Brazil rose nearly 11% last year to $54.4 billion. Brazilian exports to the United States fell 5.7% to $39.9 billion; This means the United States has a trade surplus of more than $14 billion.
The trade imbalance for services is more lopsided in favor of the United States; services exports will reach $29.6 billion in 2024, quadrupling Brazil’s service exports to the United States.
“I’m not going to cry about this,” Lula said. “If they [the US] “We don’t want to buy it from us, we will sell it to someone else.”
China has been Brazil’s largest trading partner for nearly a decade.
