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Lula Rebukes Trump’s 50% Tariff Threat as USTR Opens Brazil Trade Probe

Lula has vowed matching levies to defend Brazil’s judicial independence in response to Trump’s 50% tariff threat.

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Brazil is concerned about triggering a reduction of potentially 75 per cent of its exports to the U.S. , but what Trump fails to consider is that Brazil has some cards of its own to play, writes Peter McKenna.

Overview

  • Trump has ordered 50% tariffs on Brazilian imports from August 1 under Sections 232 and 301, linking them to the trial of his ally Jair Bolsonaro.
  • President Lula publicly rejected Trump’s authority, saying no "gringo" will give orders to Brazil and affirming the judiciary’s independence.
  • On July 14 Brazil formed an interministerial reciprocity committee and vowed to impose equivalent tariffs if the US proceeds with its threats.
  • The USTR launched investigations into Brazilian practices on digital trade, preferential tariffs, intellectual property and ethanol market access to assess unfair restrictions.
  • Analysts warn that the escalating use of emergency trade powers could violate WTO rules, disrupt key supply chains and push Brazil closer to alternative partners such as China.