Overview

• President Trump announced a 50% tariff on all Brazilian imports effective August 1 and ordered a formal Section 301 investigation into alleged unfair trade practices
• The administration framed the measure as retaliation against what it describes as a “witch hunt” targeting former President Jair Bolsonaro during his Supreme Federal Court trial
• Brazil returned Trump’s letter, summoned U.S. chargé d’affaires Gabriel Escobar and convened a crisis cabinet to coordinate its response to perceived interference
• President Lula da Silva denounced the U.S. move as an assault on Brazil’s judicial autonomy and vowed to impose reciprocal duties under the new Economic Reciprocity Law
• Markets reacted sharply to the escalation, with the real plunging over 2% against the dollar and the Bovespa index falling more than 1%