Trump's 50% Tariff on Brazil Sparks Tensions: Brazil Vows Economic Reciprocity

Washington (The Uttam Hindu): US President Donald Trump has announced a 50 percent tariff on Brazil. Trump announced this plan in his latest tariff letter, which was shared on social media. After this announcement, Brazilian President Luiz Inacio Lula da Silva also warned of 'economic retaliation'.

Trump accused Brazil of "attacking" US tech companies and conducting a "witch hunt" against former Brazilian President Jair Bolsonaro, who is on trial for his alleged role in a plot to overturn the 2022 election, the BBC reported.

Brazilian President Luiz Inacio Lula da Silva hit back at Trump in a social media post. He referred to "economic retaliation" and said that Brazil would retaliate if he raised tariffs, and warned against any interference in the country's judicial system.

Trump and Lula also sparred earlier this week over Bolsonaro's lawsuit. At the time, Lula said Brazil would not accept "interference" from anyone and that "no one is above the law." Trump this week sent 22 letters to countries around the world, including trading partners such as Japan, South Korea and Sri Lanka, outlining new tariffs on their products that he says will take effect on August 1.

These steps help revive plans he proposed in April but shelved after financial markets reacted negatively. Unlike many other countries, last year the US sold more goods to Brazil than it bought from Brazil. In the letter, Trump called the 50 percent rate "necessary to correct the grave injustices of the current regime."

He said he would order the US Trade Representative to launch a so-called 301 investigation into Brazil's digital trade practices, the BBC reported. Such a move would mark a shift towards a more established legal process that the US has used in the past to impose tariffs. In his first term, Trump took a similar step when Brazil considered taxing tech companies.

Earlier this week, Trump compared Bolsonaro's prosecution to similar legal cases he has faced. "This is nothing more or less than an attack on a political opponent — which I know a lot about!" Trump said. In response, Bolsonaro thanked the US president for his support.

Trump also criticised the recent BRICS summit in Rio de Janeiro, where the group of developing nations met on Sunday. Trump described the group, which includes Brazil, as "anti-American" and said these countries would be slapped with an additional 10 per cent tariff. President Lula on Monday hit back at Trump's social media threats. "He has to know that the world has changed. We don't want an emperor," Lula said.

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