Brazilian President Luiz Inacio Lula da Silva says that his nation would act with reciprocity.
United States President Donald Trump launched his global tariff assault into overdrive on Wednesday (Jul 9), announcing a new 50 per cent tariff on US copper imports and a 50 per cent duty on goods from Brazil, both to start on Aug 1.
“I am announcing a 50 per cent TARIFF on Copper, effective Aug 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT,” Trump said in a post on his Truth Social media platform, a reference to a “Section 232” national security trade investigation into the red metal that has been underway.
The announcement came hours after he also informed Brazil that its “reciprocal” tariff on Aug 1 would rise to 50 per cent from 10 per cent, a shockingly high level for a country with a balanced US trade relationship.
Trump first broached the copper tariff during a Cabinet meeting on Tuesday, setting off a scramble by companies to import as much copper as soon as possible from Chile and other major suppliers.
He blamed the decline of the US copper industry on past administrations, saying copper was needed for semiconductors, aircraft, electric vehicle batteries and military hardware.
“America will, once again, build a DOMINANT Copper Industry,” Trump wrote.
Trump’s Brazil tariff order came in a letter to Brazilian President Luiz Inacio Lula da Silva that vented anger over what he called the “Witch Hunt” trial of Lula’s right-wing predecessor, Jair Bolsonaro, and added to an increasingly bitter public feud with Lula.
Trump also criticised what he said were Brazil’s attacks on free elections, Americans’ free speech and “SECRET and UNLAWFUL Censorship Orders to US Social Media platforms”.
He ordered the US Trade Representative’s office to launch a new “Section 301” unfair trade practices investigation that could add even more tariffs, citing “Brazil’s continued attacks on the Digital Trade Activities of American companies”.
But Trump’s letter to Lula contained the same language as previous form letters describing Brazil’s trading relationship as “very unfair”.
Lula on Wednesday said that his nation would act with reciprocity.
“Any measure to unilaterally raise tariffs will be responded to in accordance with Brazil’s Economic Reciprocity Law,” Lula’s office said in a statement.
Brad Setser, a former US trade official now with the Council on Foreign Relations, said Trump’s action could easily spiral into a damaging trade war between the two democracies.
“This shows the danger of having tariffs that are under the unilateral control of one man,” Setser said. “It’s tied to the fact that Lula beat Trump’s friend Bolsonaro in the election.”
Brazil is the 15th largest US trading partner, with total two-way trade of US$92 billion in 2024, and a rare US$7.4 billion US trade surplus, according to US Census Bureau data.
Top US exports to Brazil are commercial aircraft, petroleum products and crude oil, coal and semiconductors while Brazil’s top exports to the US are crude oil, coffee, semi-finished steel and pig iron.
The South American country has held off on implementing a digital services tax but has sought to advance legislation with stronger competition regulations on digital platforms.
Trump earlier on his Truth Social media platform issued Aug 1 tariff notices to seven minor trading partners that exported only US$15 billion in goods to the US last year: a 20 per cent tariff on goods from the Philippines, 30 per cent on goods from Sri Lanka, Algeria, Iraq, and Libya, and 25 per cent on Brunei and Moldova.
The latest letters add to 14 others issued earlier in the week, including 25 per cent tariffs for powerhouse US suppliers South Korea and Japan, which are also to take effect Aug 1, barring any trade deals reached before then.
The new notices were issued a day after Trump said he was broadening his trade war by imposing a 50 per cent tariff on imported copper and would soon introduce long-threatened levies on semiconductors and pharmaceuticals.
Trump’s rapid-fire tariff moves have cast a shadow over the global economic outlook, paralysing business decision-making.
NEGOTIATIONS WITH THE EU
As more tariff drama unfolded in Washington, US and European Union negotiators pushed closer to a trade deal to ease Trump’s tariffs on the biggest bilateral US trading partner bloc.
Trump said he would “probably” tell the EU within two days what rate it could expect for its exports to the US, adding that the 27-nation bloc had become much more cooperative..
EU trade chief Maros Sefcovic said good progress had been made on a framework trade agreement and a deal may even be possible within days.
Sefcovic told EU lawmakers he hoped that EU negotiators could finalise their work soon, with additional time now from the extension of a US deadline to Aug 1 from Jul 9.
“I hope to reach a satisfactory conclusion, potentially even in the coming days,” Sefcovic said.
However, Italian Economy Minister Giancarlo Giorgetti had earlier warned that talks between the two sides were “very complicated” and could continue right up to the deadline.
EU officials and auto industry sources said that US and EU negotiators were discussing a range of potential measures aimed at protecting the European Union’s auto industry, including tariff cuts, import quotas and credits against the value of EU automakers’ US exports.
Source: https://www.channelnewsasia.com/world/trump-tariffs-brazil-unfair-trade-practices-probe-5230121
