Trump administration proposes 25% tariff on Brazilian imports

The Trump administration has proposed a 25% tariff on imports from Brazil, alleging that the world's 10th-largest economy employs 'unreasonable' trade measures that restrict or impede U.S. trade.

The announcement came late Monday local time after an investigation by the Office of the U.S. Trade Representative (USTR). The probe accused Brazil of lax anti-corruption enforcement and applying unfair tariffs on U.S. goods.

Notably, the United States has maintained a goods trade surplus with Brazil for years. USTR data shows that last year, U.S. exports to Brazil rose nearly 11% to $54.4 billion, while Brazilian exports to the U.S. fell 5.7% to $39.9 billion, giving the U.S. a trade surplus of over $14 billion. The services trade balance also leans heavily in favor of the U.S., with services exports reaching $29.6 billion, four times Brazil's services exports to the U.S.

U.S. Trade Representative Jamieson Greer said that he and President Trump have held 'constructive' meetings with Brazilian President Luiz Inácio Lula da Silva and Brazilian officials, but acknowledged: 'We still have significant differences in addressing the issues identified in this investigation.'

Reacting to the proposal, President Lula declared he received the decision 'with indignation.' He blamed it on his political rival in October's election, Senator Flávio Bolsonaro, son of former President Jair Bolsonaro, once dubbed by allies the 'Trump of the tropics.' Senator Bolsonaro had just visited Washington last week.

Speaking to residents of the city of Catalão, President Lula criticized: 'Bolsonaro's sons may be worse than him. They are truly traitors to the nation, going to the United States to ask a foreign country to interfere in Brazil's internal affairs. They are traitors.'

This week, President Lula for the first time singled out a U.S. official as an obstacle in his relationship with Trump. He said: 'I spoke with President Trump for three hours, and that guy Marco Rubio, head of the State Department, is a Latinophobe. He is a sworn enemy of Cuba and many Latin American countries. I told Trump that he doesn't like Brazil.'

The Brazilian government issued a statement asserting that dialogue with the U.S., which involved 'direct participation of Presidents Lula and Trump,' is being 'undermined by purely electoral and family issues' of the Bolsonaro family. Brazil expressed hope that 'the recommendations will not turn into effective tariffs,' while stressing it would use every measure to minimize damage to the economy, jobs, and incomes of Brazilians.

Previously, last year, Trump imposed a 50% tariff on Brazil, mainly in response to the country prosecuting Jair Bolsonaro for plotting to overturn the 2022 election results. Relations between Trump and President Lula appeared to improve in early May when the Brazilian leader visited the White House. However, last week, the Trump administration designated two Brazilian gangs as terrorist organizations, a move that President Lula opposed and analysts say may bolster his political rivals.

The U.S. State Department has not commented on the tariff proposal. Greer's office has scheduled a public hearing on the proposed tariffs for July 6. The Trump administration invoked Section 301 of the Trade Act of 1974 to investigate Brazil's trade practices. Trade lawyer Ryan Majerus noted that the plan excludes more than half of Brazilian imports to the U.S., including aircraft and key minerals.

Facing potential tariffs, President Lula declared: 'I will not cry over this. If they (the U.S.) don't want to buy from us, we will sell to others.' China has been Brazil's largest trading partner for about a decade.