Trump Threatens Brazil With Crippling 50% Tariff

Former President Donald Trump is threatening Brazil with a 50% tariff starting August 1, escalating trade tensions and sparking a vow of retaliation. The move comes amid disputes over Brazil’s domestic policies and trade imbalances.

Tariff Threat Over Bolsonaro Trial

In a letter posted on Truth Social, Trump accused Brazilian President Luiz Inácio Lula da Silva of a “Witch Hunt that should end IMMEDIATELY!” This accusation refers to charges against former Brazilian President Jair Bolsonaro, a close ally of Trump.

Bolsonaro is currently facing trial for allegedly attempting to stage a coup against Lula. Trump’s letter suggests the tariff is linked to his discontent with this trial, though he offered an alternative: “there will be no Tariff if Brazil, or companies within your Country, decide to build or manufacture product within the United States.”

Brazil Vows to Retaliate

Lula responded firmly to Trump’s threat, asserting Brazil’s sovereignty. “Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage,” he stated on X.

Lula further vowed to reciprocate if Trump implements the tariff. “Any measure to increase tariffs unilaterally will be responded to in light of Brazil’s Law of Economic Reciprocity,” he added.

Trade Imbalance & Impact

Unlike many other countries that have received similar tariff threats from Trump, Brazil had a $6.8 billion trade deficit with the U.S. last year. This means the U.S. exported more goods to Brazil than it imported.

Top U.S. exports to Brazil include aircraft, spacecraft, fuels, industrial machinery, and electrical equipment. A 50% tariff could significantly harm these industries. Since April, imports from Brazil to the U.S. already face a minimum 10% tariff.

Trump’s Broader Tariff Campaign

This isn’t the first time Trump has used tariffs to influence other countries’ policies. Earlier this year, he threatened tariffs on Colombian exports unless the country accepted deportees from the U.S. He also imposed tariffs on goods from Mexico, Canada, and China, citing concerns about illegal migration and fentanyl.

Trump has now sent 22 tariff letters to heads of government this week, extending the deadline for trade negotiations to August 1. Other recipients include the Philippines, Sri Lanka, Moldova, Brunei, Algeria, Libya, and Iraq.

Economists Weigh In

JPMorgan economists described the 50% tariff threat on Brazilian goods as “most surprising.” They added that “It is possible these tariffs will never be implemented, as some in the market are hoping for,” referring to the potential for negotiations or changes in policy.

Copper Tariff Announced

Adding to the trade turbulence, Trump also announced a 50% tariff on copper imports, effective August 1. This decision follows an executive action requiring the Commerce Department to assess the national security risk posed by copper imports.

“I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT,” Trump said on Truth Social. “Copper is the second most used material by the Department of Defense! Why did our foolish (and SLEEPY!) “Leaders” decimate this important Industry? This 50% TARIFF will reverse the Biden Administration’s thoughtless behavior, and stupidity.”

According to the U.S. Geological Survey, the U.S. relies on imports for about 44% of its copper needs, with Chile being the primary source (USGS 2023). Copper is crucial for electrical wiring, semiconductors, batteries, and defense equipment.

“America will, once again, build a DOMINANT Copper Industry,” Trump said. “THIS IS, AFTER ALL, OUR GOLDEN AGE!”

Market Reaction

Copper prices surged following Trump’s initial announcement. Copper futures jumped 13.1% to settle at a record high of $5.69 per pound. While prices cooled slightly, they remained elevated.

“I’ve been surprised it’s taken this long to get the copper tariff,” said Ed Mills, Washington policy analyst at Raymond James. “There are three buckets of tariffs: new revenue, national security, forced policy change. National security is the copper piece.”

Skepticism Remains

Some analysts are doubtful that tariffs can quickly revitalize America’s copper mining industry and decrease its reliance on foreign suppliers. “The US remains structurally short on copper, importing over 50% of its needs—primarily from South America—with no clear path to improving that for years to come,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Hansen added, “A tariff-induced price premium risks making copper—and by extension, US manufacturing and infrastructure—materially more expensive.” He described the 50% increase on copper tariffs as “a massive tax on consumers of copper.”