CNN
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President Donald Trump on Wednesday threatened Brazil with a crippling tariff of 50% starting August 1, according to a letter he sent to the country’s president, Luiz Inácio Lula da Silva.
In the letter posted on Truth Social, Trump alleged Lula is undertaking a “Witch Hunt that should end IMMEDIATELY!” over charges against its right-wing former president, Jair Bolsonaro.
Bolsonaro, who has bragged about his closeness with Trump, is facing trial for allegedly attempting to stage a coup against Lula.
CNN has reached out to Brazil’s Ministry of Foreign Affairs.
Unlike the 21 other countries that have received letters from Trump this week, Brazil was not set to face “reciprocal” tariffs in April. Goods from there have instead been tariffed at a minimum of 10%, which is the rate Trump has been taxing most goods from countries that were set to face “reciprocal” tariffs.
And unlike the other 21 countries, the US ran a $6.8 billion trade surplus with Brazil last year, meaning the US exported more goods to there than it imported from there.
This is not the first time Trump has used the threat of tariffs to try to change other countries’ domestic policy decisions.
Earlier this year, he threatened 25% tariffs on Colombian exports that would grow to 50% if the country didn’t accept deportees from the US. (Colombia ultimately accepted the deportees and avoided those tariffs.) Trump also imposed tariffs on goods from Mexico, Canada and China over the role he alleges they play in facilitating illegal migration to the US and enabling fentanyl to reach the country.
But despite Trump’s discontent with the Bolsonaro trial, he wrote that “there will be no Tariff if Brazil, or companies within your Country, decide to build or manufacture product within the United States.” Trump’s made nearly identical offers in a slew of other letters he sent to heads of state this week.
Other recipients of tariff letters on Wednesday included the Philippines, Sri Lanka, Moldova, Brunei, Algeria, Libya and Iraq, with rates going as high as 30% on goods they ship to the United States. The new tariffs go into effect August 1, pending negotiations.
The rates Trump said would be imposed on goods from Sri Lanka, Moldova, Iraq and Libya were lower than those he announced in early April. The rates on goods from the Philippines and Brunei were higher, compared to April levels. Meanwhile, the rate on goods from Algeria was the same (30%) as April levels.
The US and various trading partners have been negotiating new trade agreements since Trump announced so-called “reciprocal” tariffs back in April. Yet few deals have come to fruition.
During a cabinet meeting on Tuesday, Trump said “a letter means a deal.” But that doesn’t appear to be how some countries are perceiving the missives.
In all the letters except the one sent to Brazil’s Lula, Trump wrote that he takes particular issue with the trade deficits the United States runs with other nations, meaning America buys more goods from there compared to how much American businesses export to those countries. Trump also said the tariffs would be set in response to other policies that he deems are impeding American goods from being sold abroad.
Trump has encouraged world leaders to manufacture goods in the United States to avoid tariffs. If they chose to retaliate by slapping higher tariffs on American goods, Trump threatened to tack that onto the rate charged on their country’s goods shipped to the United States.
Trump has now sent 22 letters on tariff rates to heads of state this week, and more could still come.
JPMorgan economists said in a note to clients on Wednesday titled “Another day, another step closer to Liberation Day” that the 50% tariff threat on Brazilian goods was “most surprising.” (“Liberation Day” refers to April 2, the day Trump held a Rose Garden event to announce “reciprocal” tariff rates.)
“It is possible these tariffs will never be implemented, as some in the market are hoping for,” the economists said, referring to Trump’s latest threats.
Wednesday at 12:01 a.m. ET was the initial deadline Trump set three months ago for countries to ink trade deals with the US or instantly face higher tariff rates. However, on Monday he extended that deadline to August 1.
Bolsonaro, often dubbed the “Trump of the Tropics,” is on trial in Brazil for charges related to an alleged plot to overturn the 2022 election results. He and dozens of associates have been charged with attempting a coup d’état, which prosecutors allege involved a plan to potentially assassinate elected President Luiz Inácio Lula da Silva. Bolsonaro has denied wrongdoing.
This story has been updated with additional context and developments.
