Trump Moves to Cement Legal Basis for 50% Tariffs on Brazil

The Trump administration is drafting a new emergency declaration that would give it legal authority to impose a 50% tariff on Brazilian imports as soon as 1 August, according to people familiar with the plan. Staff at the Office of the U.S. Trade Representative outlined the proposal this week in closed-door briefings to congressional aides, signalling the White House intends to move quickly despite the absence of a formal trade dispute with Brazil. Unlike earlier tariff actions justified by large U.S. trade deficits, Washington runs a surplus with Brazil. The prospective duty is instead tied to President Luiz Inácio Lula da Silva’s prosecution of former president Jair Bolsonaro, a close ally of Donald Trump. Lula has condemned the threat as “unacceptable blackmail,” while a group of Democratic senators warned in a letter that weaponising tariffs to influence another country’s judiciary would be an abuse of presidential power. Diplomatic efforts to defuse the standoff have stalled. Vice-President Geraldo Alckmin said he reiterated Brazil’s willingness to negotiate in a recent call with U.S. Commerce Secretary Howard Lutnick, but Brasilia has received no follow-up from Washington. The uncertainty pushed the Brazilian real down as much as 1% against the dollar on Friday, and industry lobby CNI said companies are bracing for retaliatory measures. Brazilian officials estimate the proposed tariff could cost the country more than 100,000 jobs and shave 0.2 percentage point from gross domestic product. Agribusiness group CNA projects the value of shipments to the United States could be cut in half. Executives from U.S. firms operating in Brazil, including General Motors and Alphabet, have so far declined to lobby the White House, fearing possible political backlash if they intervene.