Brazil Warns of Retaliation as Trump Threatens 50% Tariffs on Exports

Brazilian President Luiz Inacio Lula da Silva pledged a strong response if U.S. President Donald Trump follows through with proposed 50% tariffs on Brazilian exports, set to take effect August 1. Speaking to Record TV, Lula emphasized a diplomatic approach first but vowed to match any U.S. tariffs equally, citing new legislation granting presidential powers to retaliate against trade restrictions.

“If they’re going to charge us 50, we’ll charge them 50,” Lula said, referencing Brazil’s newly passed reciprocity law. The law also allows countermeasures such as restricting imports, suspending intellectual property rights, and limiting investments from the U.S.

Tensions escalated after Trump tied the tariffs to legal proceedings against Brazil’s former president Jair Bolsonaro, currently on trial for attempting to overturn Lula’s 2023 election win. Trump labeled the case a “witch hunt,” prompting Lula to criticize Bolsonaro for supporting the tariffs through his son Eduardo’s lobbying in the U.S.

In response, Bolsonaro praised Trump’s stance, claiming such measures reflect Brazil’s shift away from democratic values and would not have occurred under his leadership. He called for a return to “institutional normality.”

The looming tariffs have triggered concern across Brazilian industries. Aviation and banking stocks fell Thursday, with Embraer, Itau Unibanco, and Santander among those impacted. Brazilian trade groups, especially in agriculture, warned of severe economic fallout. The U.S. is Brazil’s second-largest trading partner, and the tariff could cripple exports of coffee, beef, orange juice, and ethanol.

Lula announced a new committee to review trade policy with the U.S., while business leaders urged a diplomatic resolution to preserve bilateral ties.