Brian Winter in POLITICO's Newsletter about U.S. Latest Tariffs on Brazil
Brian Winter in POLITICO's Newsletter about U.S. Latest Tariffs on Brazil
"Lula politically is quite happy with the status quo and has to measure that against whatever action he takes next," said the AS/COA vice president.
TARIFF HIKE
ADOPTION DAY: The Trump administration’s 25 percent tariff on certain Brazilian exports goes into effect today. Lula vowed to retaliate in the immediate aftermath of the announcement, pledging to activate Brazil’s “Economic Reciprocity Law” in a post to social media, which allows for targeted countermeasures.
But Brian Winter, vice president of policy at the Americas Society/Council of the Americas, told Morning Trade that it may not be in Lula’s interest to do so.
The politics: Lula is running against former Brazilian President Jair Bolsonaro’s son, Flávio Bolsonaro, in the forthcoming presidential election. The latest U.S. tariffs have buoyed his campaign.
“Most Brazilians, by a healthy margin, blame the Bolsonaro family rather than Lula for these tariffs,” Winter said.
Trump last year slapped 40 percent duties on Brazil over its prosecution of Jair Bolsonaro for his role in an attempted coup following the 2022 election. Those were struck down by the U.S. Supreme Court in February.
The latest 25 percent duties are the result of a separate investigation into Brazil’s trade practices, but Winter said most Brazilians see no distinction.
“In the minds of the majority in Brazil, the Bolsonaro family started the ball rolling on these tariffs,” he added.
Blunted impact: Around 44 percent of Brazil’s exports to the U.S. are spared from the new duties, according to an analysis from the Peterson Institute for International Economics, blunting the impact of the duties. Brazil’s government has also unveiled a credit worth $2.6 billion to soften the blow on its exporters.
Any retaliation from Brazil could spur further U.S. tariff actions, which might not be so easy to mitigate, Winter said.
“Lula politically is quite happy with the status quo and has to measure that against whatever action he takes next,” Winter concluded...
