Trump's Brazil tariffs could boomerang on Flavio Bolsonaro

Late last week, the Trump administration imposed what Brazilian officials had spent weeks bracing for: a fresh 25% tariff on most Brazilian exports, set to take effect July 22. The United States Trade Representative (USTR) framed the move as the conclusion of a Section 301 investigation. This provision of the Trade Act of 1974 empowers USTR to investigate a country’s trade practices and recommend tariffs if it finds them unreasonable or discriminatory. USTR cited Brazil’s digital-payments system Pix, its ethanol tariffs, deforestation, and Brasília's refusal to bend to U.S. tech platforms on content moderation as reasons for the new punitive measures. Although these levies apply to a relatively small portion of everything Brazil sells abroad, they stand on firm legal ground and will likely be harder to reverse than last year’s blanket 50% tariff, which was struck down by the Supreme Court in February. In a nod to the domestic political cost of Trump’s trade wars, staples like coffee, beef, and orange juice were notably excluded from new tariffs, but apparel, steel, sugar, and paper were not.The White House says Brazil has rigged the game against American companies. Brazilian officials tell a different story. Foreign Minister Mauro Vieira said American negotiators wanted the “total, unrestricted, and exclusive opening” of entire sectors of the Brazilian economy with no reciprocal benefit for Brazilian businesses. Vieira also noted that 76% of American imports enter Brazil tariff-free and that the United States runs a trade surplus with Brazil. What actually irritated Washington, Brazil’s chief diplomat claimed, was the fact that his country “did not bow” to demands that would have amounted to “capitulation.”Indeed, trade balances are not plausibly what this spat is really about. It has to do with something closer to what Secretary of State Marco Rubio all but admitted when he accused President Luiz Inácio Lula da Silva of putting “his own ego” ahead of a deal, framing the tariffs as “the price” Brazil must pay for failing to negotiate “in good faith.” For this administration, any other country’s assertion of its own interest, be it over payment infrastructure, biofuel policy, or environmental regulation, is an affront requiring punishment. Trump may have been reined in by the Supreme Court in last year’s trade war against Brazil, and the U.S. president may have since established a personal rapport with Lula, but the new round of tariffs makes clear that the administration has not rethought its fundamentally hostile policy toward Latin America’s largest nation.There’s an irony in Washington’s chosen target, Pix. The payment system, which the Trump administration frames as a protectionist plot against Visa and Mastercard, is in reality a wildly successful piece of free public infrastructure that has rapidly expanded financial access to Brazil’s poor and informal workers. Washington’s objection to it is nakedly about market access for American financial firms, dressed up as a fairness complaint. Ethanol is much the same: Washington complains about Brazil’s 18% tariff on American ethanol even as the U.S. taxes sugar imported above quota — the tier covering most Brazilian sugar — at an effective rate near 100%, roughly five times steeper. That’s no small detail, since Brazilian mills can shift the same cane crop toward whichever product pays better; squeeze ethanol, and sugar is the natural fallback, except when Washington taxes it even harder. These tariffs have entered force despitedozens of reported attempts by Brasília to reach members of the Trump administration to forestall them and enter serious trade negotiations. From Brazil’s perspective, the U.S. is refusing to even acknowledge the country’s legitimate trade interests.The Trump administration’s trade war is inherently politicized, aiming less at correcting specific commercial grievances than at disciplining a government Washington has never been fully comfortable with — because it is led by a progressive elder statesman; because it has resisted American pressure over the criminal prosecution of its most recent former president, Jair Bolsonaro; and because it insists on an independent foreign policy that includes deepening ties with China and the BRICS bloc. Speaking of Bolsonaro, there’s a reason Washington’s tariffs and the Brazilian presidential race have become inseparable. Senator Flávio Bolsonaro, the son of the convicted former president and Lula’s likely opponent in the October election, visited Trump, Rubio, and other senior officials in Washington in May. He returned to lobby USTR directly again in July, this time asking for a 180-day delay so the tariffs wouldn’t land before Brazilians voted. His argument was candid about the politics involved: imposing the tariffs now, he told American officials, would hand Lula “precisely the political victory” the president’s campaign has been “engineering.” Lula, for his part, has accused the senator, whose brother advocated for Trump’s trade war against Brazil last year, of committing “yet another act of treason against the Fatherland.”Whatever happened in private discussions, the tariffs arrived on schedule, four months before an election in which the Bolsonaro family’s Washington connections have proven politically damaging. A Genial/Quaest poll released the same day as the tariffs found 51% of Brazilians believe the younger Bolsonaro encouraged Washington’s pressure campaign to damage Lula’s government, up from 47% a month earlier, against just 30% who accept his account that he lobbied against the tariffs. Forty-two percent said the new tariffs made them more likely to vote for Lula; only 27% said the same about Flávio. If the tariffs were meant to tip the electoral scales toward a more pliant government, the evidence so far suggests they may in fact be validating Lula’s argument that Washington is leaning on trade policy to interfere in Brazil’s domestic politics.The Lula administration has made clear it won’t accept Washington’s terms. Brazilian voters will have their own say on that stance this October, in a presidential election in which Washington’s pressure campaign is a live issue. Washington may believe only American interests are legitimate. Brazilians, for now, still get to decide for themselves.