Brazil hits back at Trump tariffs as Lula threatens 50% levies on US goods

Brazilian President Luiz Inacio Lula da Silva has threatened to impose a 50 per cent tariff on all US goods after his American counterpart, Donald Trump, announced 50 per cent duties on all its exports.

“If he charges us 50 per cent, we’ll charge him 50 per cent,” Lula told local news outlet Record. Trump on Thursday announced a 50 per cent tariff on Brazilian goods, accusing the current government in the country of running a “witch-hunt” against its former president Jair Bolsonaro. The leader is facing trial over his attempt to overturn his 2022 election defeat.

Lula further said that Brazil is planning to appeal to the World Trade Organisation and propose international investigations into Trump tariffs and “demand explanations” from the US government over its trade measures.

Early Thursday, Lula met with Brazilian ministers to discuss how to respond to Trump’s 50 per cent tariff threat. According to his chief of staff’s office, a study group will be formed to determine the government’s next steps.

Meanwhile, Trump has already pledged to take action if Brazil retaliates against his tariffs. “If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 50% that we charge,” he wrote in a letter to Lula.

The 50 per cent US tariff on Brazilian goods will take effect August 1, Trump said in his letter, mirroring a deadline that dozens of other economies face.

On the same date, a 50 per cent tariff on US imports of copper, a key metal used in green energy and other technologies, will take effect.

Trump’s message to Lula was the latest in more than 20 such letters the US president has released since Monday, after repeatedly threatening to simply decide a rate for countries as negotiations continue over his elevated “reciprocal” tariffs.

Brazil had not been among those threatened previously with duties above a 10 per cent baseline, and the United States runs a goods trade surplus with Brazil.

With inputs from agencies