Dear Donald, thanks! Yours, Lula
Trump’s astonishing battering of Brazil
MAGA bullying is backfiring, boosting Lula’s government
A collage of images of Donald Trump, Eduardo Bolsonaro, Jair Bolsonaro, Luiz Inácio Lula da Silva and Alexandre de Moraes / Illustration: Ricardo Santos
Rarely since the end of the cold war has the United States interfered so deeply with a Latin American country.
On July 9th Donald Trump pledged tariffs of 50% on Brazilian exports, citing a “witch hunt” against Jair Bolsonaro, the far-right former president, who is soon due to stand trial for allegedly plotting a coup, a charge he denies.
On July 15th Jamieson Greer, the United States trade representative, started investigating Brazil’s trade practices.
On July 18th the US State Department revoked the visas of most Brazilian Supreme Court judges and other officials connected to Mr Bolsonaro’s prosecution.
Marco Rubio, the secretary of state, has said he wants to use the Global Magnitsky Act to place sanctions on Alexandre de Moraes, a prominent justice, an action usually reserved for dictators and warlords.
Mr Trump and Brazil’s president, Luiz Inácio Lula da Silva, are ideological foes and Mr Trump’s allies have long decried a probe Mr Moraes leads into online disinformation.
Yet the trigger for Mr Trump’s attack appears to have been the summit of the BRICS, a group of emerging-market countries, that Brazil hosted on July 6th and 7th.
Lula, as the president is known, has called the threats “unacceptable blackmail” and an attack on Brazil’s sovereignty.
He also threatened to start taxing American technology companies.
Brazil’s Congress, which is controlled by right-wing parties, has rallied around Lula and is mulling retaliatory tariffs.
But Lula saved his venom for Mr Bolsonaro and his son, Eduardo, a congressman, who took leave from his job in March and moved to Texas, where he has been lobbying Republican congressmen to put sanctions on Mr Moraes.
Lula has called them “traitors”.
“Let them be ashamed, hide in their cowardice, and let this country live in peace!” he told a rally on July 17th.
Instead of rebutting the charge, Eduardo boasts about his access to the White House.
After Mr Moraes’s visa was revoked, he posted on X: “I can’t see my father, and now there are Brazilian officials who won’t be able to see their families in the US either!”
Brazil’s powerful Supreme Court has responded aggressively, too.
On July 18th Mr Moraes ordered Mr Bolsonaro to wear an electronic ankle monitor, confined him to house arrest during nights and weekends, and barred him from speaking to foreign officials or giving interviews.
On July 19th Mr Moraes froze Eduardo’s assets as part of an investigation into whether his lobbying efforts are an attempt to obstruct the case against his father.
If drawing Mr Trump’s ire was supposed to bolster Brazil’s right ahead of a general election next year, the plan is backfiring.
Brazilians of all stripes are backing Lula.
Effigies of Mr Trump have been burned on the streets.
Lula’s approval rating, which had been flagging, has perked up.
He now leads the field of potential candidates for next year’s race.
Mr Trump’s tariffs have also given Lula an “incredible get-out-of-jail-free card”, says Andre Pagliarini of the Washington Brazil Office, a think-tank.
“Whatever economic pain Brazil is likely to feel between now and the election, the government can credibly point to the Trump tariffs as the cause, whether it’s true or not.”
In fact, the tariffs may cause pain for Mr Bolsonaro and his right-wing allies.
Only 13% of Brazil’s exports go to the United States, worth $43bn a year (some 28% go to China, a share likely to grow if Mr Trump’s tariffs are enacted).
Goldman Sachs, a bank, reckons tariffs may lower growth by 0.4 of a percentage point to around 2% this year.
Yet the impact is likely to fall disproportionately on companies based in regions that are Bolsonaro strongholds.
More than a third of unroasted coffee beans imported into the United States come from Brazil.
The vast majority of imported orange juice comes from Brazil, too.
Beef imports are growing fast.
Economists at the Federal University of Minas Gerais reckon that some 110,000 Brazilians will lose their jobs if the tariffs come into effect, mostly in agriculture.
It is telling that Brazil’s national confederation of farmers, usually a Bolsonaro stalwart, condemned the “political nature” of Mr Trump’s tariffs.
Even Mr Bolsonaro has tried to distance himself.
He says the tariffs have “nothing to do with us”.
Brazilians are particularly riled by the idea that the Trump administration may go after Pix, the popular instant-payments system launched by the central bank in 2020.
This was not threatened explicitly, but Mr Greer included “electronic payment services” on a list of Brazilian practices his office deems “unreasonable or discriminatory” to American firms.
“The idea that Pix represents an unfair trade practice against the US is unfounded,” says Ralf Germer of PagBrasil, a leading Brazilian payments processor.
Pix has spurred competition in Brazil’s previously fusty banking sector by offering low-cost infrastructure whereby upstart firms can easily provide financial services.
That increased competition has also undercut American payment firms like Visa and Mastercard.
Complaints about unfair trade practices have merit.
Brazil is one of the world’s most closed economies, with 86% of imports facing non-tariff barriers (as do 77% of imports to the United States and 72% of imports globally).
Domestic industry receives endless bungs from the federal and local government.
But if this is Mr Trump’s real concern, he has not said so.
Brazil’s government has been attempting to contact the White House since May in order to negotiate a trade deal, but their entreaties have been ignored.
Only Eduardo Bolsonaro, it seems, has Mr Trump’s ear.
“Trump is someone I admire, someone I look up to, someone I want to get to know better so that, who knows, maybe in the future, if I have power, I can follow in his footsteps in Brazil,” he says, speaking by video call from his office in Texas, which is adorned with MAGA hats and crucifixes.
Lula appears reinvigorated by the feud.
He now wears a blue cap that says “Brazil belongs to Brazilians.”
But a former Brazilian diplomat says Lula’s officials worry that the boost may not last.
If tariffs come into force and economic pain sets in, Lula will struggle to lay all of the blame with Mr Bolsonaro.
The question is which 79-year-old will back down first: the impetuous Mr Trump or the strong-willed Lula.
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