If President Trump’s threatened 50% tariffs on Brazil go into effect on Aug. 1, a cappuccino will be so expensive you’ll need a customs form. He would quintuple the 10% base tariff imposed on Brazil and most countries with his so-called April 2 “Liberation Day” tariffs. Trump has generally sought to justify his high tariffs on the grounds that trade deficits exist between the United States and other countries. But last year America actually had an $8.6 billion trade surplus with Brazil, so why the tariffs?
In a letter to President Luiz Inácio Lula da Silva, Trump said the higher levy would be imposed for two reasons. The first is the “international disgrace” of putting on trial former President Jair Bolsonaro, Trump’s friend, for allegedly plotting a coup to stay in power by overturning Lula’s 2022. The second is censoring U.S. social media companies.
It’s highly unlikely federal law “would permit the president to impose tariffs in response to a judicial ruling in Brazil,” Clark Packard told us; he’s a research fellow in U.S. international trade and investment law at the Cato Institute. And such tariffs “likely violate the United States’ commitments under World Trade Organization treaties.”
Packard added tariffs are supposed to be only to protect American economic interests. But the 50% Brazil tariffs more resemble sanctions, which involve national security and involve different laws approved by Congress, such as the International Emergency Economic Powers Act. “Although the president will surely claim they are about protecting American workers and encouraging reshoring,” Packard said.
A further problem for us is Trump interfering in the internal affairs of another country. We can’t police all 193 members of the United Nations. What happened to America First?
About 30% of American java comes from Brazil. Switch to orange juice? It’s worse as 60% of imported orange juice is also from Brazil. Brazil also isn’t some small country Trump can push around. Its economy, based on the PPP number, is $4 trillion a year, eighth largest. Trump should drop the 50% tariff before he gives the two-thirds of U.S. adults who are coffee sippers the jitters.
