US President Donald Trump has announced a new round of tariff increases aimed at numerous countries, including Brazil, which will face a harsh 50% rate – the highest ever in this round. The tariff announcement also contained tariffs on additional countries, including 30% on Algeria, Libya, Iraq, and Sri Lanka, 25% on Brunei and Moldova, and 20% on imports from the Philippines.
The tariffs are slated to go into effect on August 1, but Trump has left the door open for more negotiations, despite his insistence that no extensions will be given.
While most of these rates had been predicted, Brazil’s inclusion was unexpected and is commonly interpreted as a warning shot to BRICS countries, which Trump sees as undermining the US dollar’s dominance. Brazil stands out among the targeted nations because it has a trade deficit with the United States.
The move, which is directly related to Brazil’s prosecution of former President Jair Bolsonaro, represents a significant increase in Trump’s use of trade as political pressure. Trade experts have slammed the proposal, pointing out that linking tariffs to judicial processes is rare and might destabilize established trade rules. Meanwhile, Brazilian President Luiz Inacio Lula da Silva issued a forceful response, denouncing any foreign involvement in domestic judicial processes and threatening of retaliatory economic measures.
