Brazil has vowed to defend its supreme court from “unacceptable interference” after Donald Trump imposed 50 per cent tariffs and sanctioned a Brazilian judge over the trial of his far-right political ally, ex-president Jair Bolsonaro.
Trump’s unprecedented moves leave President Luiz Inácio Lula da Silva’s leftwing government facing some of the world’s highest tariffs from August 6, and have triggered the worst crisis in living memory between the Americas’ two biggest democracies.
Unusually in his latest round of global trade negotiations, Trump cited mainly political justifications for the high tariffs on Brazil. He accused Brasília in a White House executive order on Wednesday of “politically persecuting a former president of Brazil” and of “contributing to the deliberate breakdown in the rule of law”.
Lula rejected as “unjustifiable” the use of what he said were political arguments to justify the US measures, saying: “Brazil remains willing to negotiate trade aspects of its relationship with the United States, but will not relinquish the defence mechanisms provided for in its legislation.”
Although Trump left a one-week window before the tariffs take effect, analysts said the political slant of his demands made it very difficult for the Brazilian government to engage in substantive talks over the measures. Economists said the tariffs would hit coffee and meat exporters hard.
“He’s putting more weight on things that are going to be difficult for the Brazilians to deliver,” said Alberto Ramos, chief Latin America economist at Goldman Sachs. “They’re not going to interfere with the judicial proceedings on Bolsonaro.”
Bolsonaro could spend the rest of his life in jail if Brazil’s supreme court convicts him on charges of plotting a coup and planning Lula’s assassination in the wake of his election defeat in October 2022.
He has pleaded not guilty but has admitted in court to having discussed “other alternatives” with military chiefs.
The defendant’s congressman son Eduardo hailed as a triumph the US actions against Brazil, which included Magnitsky Act human rights sanctions against Alexandre de Moraes, the judge overseeing the Bolsonaro case. Eduardo has been running a lobbying campaign in Washington for tough measures against Brazil.
“Mission accomplished,” he posted on Instagram.
Finance minister Fernando Haddad was readying a support package including emergency loans to help the worst-affected companies. Financial market reaction was muted as around 700 Brazilian products that are hard to substitute quickly in large quantities — such as orange juice, Embraer aircraft and iron ore — were granted tariff exemptions.
Brazil’s foreign minister Mauro Vieira met his US counterpart Marco Rubio in Washington on Wednesday. “He reiterated to Rubio that if his president . . . keeps applying economic pressure to try to interfere in Brazilian democracy, that will not produce the result he wants,” a senior Brazilian official said. “The government will not give in to that kind of pressure.”
But former Trump strategist Steve Bannon told the Financial Times that the Bolsonaro issue was “a big focus” of the Trump administration because the US president “understands that Bolsonaro is the Trump of the tropics. He’s very close to Bolsonaro”.
“We detest Lula and the Marxists and the way they’re running Brazil, and the kangaroo court under [de] Moraes,” Bannon added.
The Americas’ two biggest economies have been on a collision course since Trump astonished Brazil’s democratically elected government with a July 9 letter demanding the supreme court “end immediately” Bolsonaro’s trial.
The letter threatened 50 per cent tariffs “to rectify the grave injustices of the current regime”, including “SECRET and UNLAWFUL Censorship Orders to US Social Media platforms”.
Brazil’s supreme court has been among the world’s most aggressive in holding tech companies responsible for taking down content it deems as hate speech, anti-democratic or an incitement to violence.
Further complicating matters, Trump has referred to Brazil’s “unsustainable Trade Deficits” and opened an investigation for allegedly unfair trade practices. Figures from the US Trade Representative show the US ran a $7.4bn surplus in its $92bn total goods trade with Brazil last year, while the Lula government says when services are added, the US surplus with Brazil reached $28.6bn.
Celso Amorim, Lula’s top foreign policy adviser, said last week he saw no prospect of serious talks. “I don’t see a way out,” he told the FT. “I don’t see how to negotiate. I don’t see what could be offered.”
Rubio had already imposed visa bans on eight of Brazil’s 11 supreme court justices this month after de Moraes ordered Bolsonaro to wear an ankle tag, imposed a curfew order and banned him from giving interviews.
The US, a senior Brazilian official complained, “is attacking the biggest democracy in Latin America for having defended itself against an attempted military coup. This is unprecedented”.
Paulo Figueiredo, grandson of Brazil’s last military dictator and a close ally of Eduardo Bolsonaro, said Brasília “has no chance” in talks with Trump’s administration.
“They don’t get it,” he said from the US, pointing out similarities between the Bolsonaro case and past US attempts to prosecute Trump for conspiring to overturn election results.
“How are you going to come and tell the Trump administration that you did [the trial] to protect democracy because Bolsonaro was a threat to democracy [who] attempted an insurrection? They’ll just say: ‘Oh yes, we heard all that before — about us. So that’s not going to fly.’”
Rubens Ricupero, a veteran Brazilian diplomat and former ambassador to the US, said he could not recall a crisis of similar magnitude. “In practice there are no relations” at present, he said.
Ricupero noted that Lula was unusual among world leaders in having had no contact with Trump, but questioned whether that would have made a difference. “Their personalities and ideological orientation are like oil and water,” he said.
