Decision to hit Brazil with 25% tariffs becoming ‘election gift’ to President Lula, predecessor Bolsonaro tells US
(Bloomberg) — The US decision to hit Brazil with 25% tariffs renews a trade fight with President Luiz Inacio Lula da Silva’s government just months
(Bloomberg) — The US decision to hit Brazil with 25% tariffs renews a trade fight with President Luiz Inacio Lula da Silva’s government just months ahead of elections, potentially influencing the outcome of a highly polarized race. While the Trump administration cited unfair trade practices for imposing tariffs on certain Brazilian goods from July 22, the impact may end up political with presidential elections due in October. Lula, as Brazil’s president is known, has successfully rallied public opinion behind him when faced with earlier US trade pressure. He is set to face off with right-wing Senator Flavio Bolsonaro, who flew to the US earlier this month to testify against the trade penalties then under consideration, saying they’d only help the leftist leader’s re-election bid. “The proposed tariffs would reward the very offenders they are meant to punish,” Bolsonaro wrote in his submission to the Office of the US Trade Representative. Those appeals from the son of former President Jair Bolsonaro, an ally of Donald Trump, appear to have been set aside during the US investigation. Brazilian business groups have already started criticizing the measure, warning it could deal a significant blow to the country’s exporters. The yearlong inquiry “found a number of Brazil’s practices to be unreasonable and discriminatory, restricting the competitive position of American farmers, workers, innovators, and exporters,” the Office of the US Trade Representative said in a post on X late Wednesday. US Trade Representative Jamieson Greer said the action was necessary “to address these unfair trade practices to ensure American workers and companies can compete on a level playing field.” The US remains open to negotiations to address the issues identified, he said in a statement.
Imports of coffee, beef, and certain ethanol products would be exempt from the new duties, a senior administration official told reporters ahead of the announcement. Ethanol would be subject to the new tariffs, however. While exempting key Brazilian exports potentially limits the fallout for Latin America’s largest economy, the politics look harder to set aside. Lula’s poll ratings rose after he cast US pressure as an attack on Brazil’s sovereignty, and he’s now been gifted a potent line of attack against his opponent, whose father sat at the center of Trump’s initial efforts to hammer Brazil with trade levies. Lula’s campaign will revive the strategy it adopted when the tariffs were first announced in early June, instructing its grassroots supporters to use social media to link the tariff hike to Bolsonaro, reinforcing the narrative that he betrayed the country, according to a person involved in the plan. The campaign plans to center its messaging on the slogan “TariFlávio,” while setting aside, at least for now, the issue of alleged interference in Brazil’s election, the person said, asking not to be name because they were not authorized to discuss campaign strategy publicly. ‘No justification’ Brazil’s government denounced the tariffs and said it would take measures to insulate its economy from their effects. It also said the Bolsonaro family had worked with the US government to enable them. “There is no justification for unilateral measures against our country,” the government in Brasilia said in a statement. “We will continue to diversify our trade partnerships and open new markets for our products.” The US administration proposed an additional 25% duty on imports from Brazil in a June 1 report following an investigation pursued under Section 301 of the Trade Act of 1974.
The BriefWire