Trump slaps 50 pc tariff on Brazil over Bolsonaro trial

US President Donald Trump singled out Brazil for import taxes of 50 per cent on Wednesday (July 9) for its treatment of its former president, Jair Bolsonaro, showing that personal grudges rather than simple economics are a driving force in the US leader's use of tariffs.

Trump avoided his standard form letter with Brazil, specifically tying his tariffs to the trial of Bolsonaro, who is charged with trying to overturn his 2022 election loss. Trump has described Bolsonaro as a friend and hosted the former Brazilian president at his Mar-a-Lago resort when both were in power in 2020.

Witch hunt, must end immediately: Trump

“This Trial should not be taking place,” Trump wrote in the letter posted on Truth Social. “It is a Witch Hunt that should end IMMEDIATELY!” There is a sense of kinship as Trump was indicted in 2023 for his efforts to overturn the results of the 2020 US presidential election. The US president addressed his tariff letter to Brazilian President Luiz Inacio Lula da Silva, who bested Bolsonaro in 2022.

Also read: Trump says BRICS members, including India, will have to pay 10 pc tariff

Bolsonaro testified before the country's Supreme Court in June over the alleged plot to remain in power after his 2022 election loss. Judges will hear from 26 other defendants in coming months. A decision could come as early as September, legal analysts say. Bolsonaro has already been ruled ineligible until 2030 by the country's electoral authorities.

‘Trump misinformed,’ says Brazil’s vice president

Brazil's Vice President, Geraldo Alckmin, said he sees “no reason” for the US to hike tariffs on the South American nation.

“I think he has been misinformed," he said. “President Lula was jailed for almost two years. No one questioned the judiciary. No one questioned what the country had done. This is a matter for our judiciary branch.”

Also read: ‘US close to making trade pact with India’, says Trump as he slaps tariff on 14 nations

Trump also objected to Brazil's Supreme Court fining of social media companies such as X, saying the temporary blocking last year amounted to “SECRET and UNLAWFUL Censorship Orders.” Trump said he is launching an investigation as a result under Section 301 of the Trade Act of 1974, which applies to companies with trade practices that are deemed unfair to US companies.

Unmentioned in the letter was that X is owned by Elon Musk, Trump's multibillionaire backer in the 2024 election whose time leading Trump's Department of Government Efficiency recently ended and led to a public feud over the US president's deficit-increasing budget plan. Trump also owns a social media company, Truth Social.

US-Brazil trade ties

The tariffs starting from August 1 would be a dramatic increase from the 10 per cent rate that Trump levied on Brazil as part of his April 2 “Liberation Day” announcement. In addition to oil, Brazil sells orange juice, coffee, iron and steel to the US, among other products. The US ran a USD 6.8 billion trade surplus with Brazil last year, according to the Census Bureau.

Also read: Trump announces 25 pc tariffs on Japan, South Korea; warns against retaliation

Trump initially announced his broad tariffs by declaring an economic emergency, arguing under a 1977 law that the US was at risk because of persistent trade imbalances. But that rationale becomes problematic in this particular case, as Trump is linking his tariffs to the Bolsonaro trial and the US exports more to Brazil than it imports.

Letters to 7 nations

Trump on Wednesday also sent letters to the leaders of seven other nations. None of them — the Philippines, Brunei, Moldova, Algeria, Libya, Iraq and Sri Lanka — is a major industrial rival to the United States.

Most economic analyses say the tariffs will worsen inflationary pressures and subtract from economic growth, but Trump has used the taxes as a way to assert the diplomatic and financial power of the US on both rivals and allies. His administration is promising that the taxes on imports will lower trade imbalances, offset some of the cost of the tax cuts he signed into law on Friday and cause factory jobs to return to the United States.

(With inputs from agencies)