Trump administration proposes 25% tariffs on Brazil despite US trade surplus

The Trump administration proposed 25% tariffs on imports from Brazil, charging that the world’s 10th-biggest economy engages in trade practices that are “unreasonable’’ and that “burden or restrict US commerce”.Luiz Inácio Lula da Silva said he received the decision “with indignation”. The Brazil president also blamed the decision by the US administration on his rival in October’s elections, Flávio Bolsonaro, the senator who visited Washington last week. The senator is the son of former president Jair Bolsonaro, once nicknamed “the Trump of the Tropics” by his allies.The announcement late on Monday came after an investigation by the office of the US trade representative, charging Brazil with lax anti-corruption enforcement and unfair tariffs of its own, among other things.The US has had a goods trade surplus with Brazil for years.The US trade representative, Jamieson Greer, said that he and Donald Trump had “constructive’’ meetings with Lula and other Brazilian officials. But he said: “We continue to have substantial differences in resolving the issues identified in this investigation.’’Lula on Tuesday cited other reasons for the punishing tariff proposal. For the first time he named an American official as a hurdle to his relations with Trump and once again he threatened to retaliate.“I spoke to President Trump for three hours, and that Marco Rubio guy, the head of the state department, he is anti-Latin American,” Lula said. “He is a deadly enemy of Cuba, a deadly enemy of many Latin American countries. I already told Trump that he does not like Brazil.”The US state department did not immediately respond a request for comment from the Associated Press on Tuesday.Brazil’s government said in a statement that its dialogue with American counterparts, which includes “personal involvement of Presidents Lula and Trump”, was being “sabotaged by merely electoral and family matters” of the Bolsonaros.It added that it hoped “the recommendations do not become effective tariffs”.“But we stress we will adopt every measure that is capable of reducing the damage that might be caused to the national economy, to the jobs and the income of Brazilians,” the country’s government said.Last year, Trump had slapped Brazil with a 50% tariff, mainly to protest against its prosecution of Jair Bolsonaro for trying to overturn his electoral defeat in 2022. His relationship with Lula seemed to have improved in early May, when the Brazilian visited the White House.But last week, the Trump administration designated two Brazilian gangs as terrorist organizations after Bolsonaro’s visit. Lula opposes the designation, which analysts say could bolster his political rival.Greer’s office has scheduled a public hearing on 6 July on the proposed tariffs.Ryan Majerus, a trade lawyer and partner at King & Spalding, said that the administration’s plan excludes more than half of US imports from Brazil, including aircraft and key minerals.The Trump administration invoked section 301 of the Trade Act of 1974 to launch the investigation into Brazil’s trade practices.Bolsonaro travelled to meet officials in Washington last week in the wake of a scandal at home in which he admitted receiving funds from a disgraced banker. Another son, the former lawmaker Eduardo Bolsonaro, was also present.On Tuesday, Trump posted a photo of the Bolsonaros in the Oval Office on his social media site.“These sons of Bolsonaro can be worse than him. They are actually sellouts of our country, they went there to ask a foreign nation to meddle in Brazilian affairs,” Lula said in a speech to residents of the city of Catalão, south of capital Brasília. “They are traitors.”The US supreme court ruled in February that Trump overstepped his authority by using a different law – the International Emergency Economic Powers Act (IEEPA) of 1977 – to impose sweeping tariffs on US trading partners, including Brazil.However, section 301 tariffs have survived legal challenges, and the administration is likely to use that authority to impose other tariffs and to recoup some of the tax revenue lost when the supreme court rejected the IEEPA tariffs.Brazil’s president said that during a visit to Washington in early May, he handed Trump documents showing that the US has a trade surplus with Brazil.Documents published by the US trade representative show that last year, US exports to Brazil rose nearly 11% to $54.4bn. Brazilian exports to the US fell 5.7% to $39.9bn, meaning the US had a trade surplus of more than $14bn.The trade imbalance for services is more lopsided in favor of the US, with services exports in 2024 reaching $29.6bn, quadruple the Brazilian services exports to the US.“I am not going to cry about it,” Lula said. “If they [the US] don’t want to buy from us, we will sell to someone else.”China has been Brazil’s biggest trading partner for about a decade.