COMMENTARY: Brazil at 25% — The Trade Retaliation Targeting Lula and Challenging the Hemisphere

Maxime Marquette

2026-06-24 13:09:20

The Supreme Court Rewrites the Rules of the Game

The Supreme Court’s February 20, 2026, decision in the cases of Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc. marks a structural turning point in U.S. trade policy. The justices ruled that the IEEPA—a statute designed to freeze enemy assets or regulate financial transactions in times of crisis—cannot be invoked to impose tariffs. The power to tax imports belongs constitutionally to Congress, and any delegation of that power to the president must be explicit. It was not explicit under the IEEPA.

The consequences were immediate and severe. All so-called reciprocal tariffs imposed since April 2025, the base tariff of 10%, the emergency surcharges related to the fentanyl crisis, and above all the 40% tariff imposed specifically on Brazil in the summer of 2025—all of this vanished. The U.S. government was left facing a potential bill of more than $130 billion in possible reimbursements to aggrieved importers. The Court left the reimbursement mechanisms unresolved, a poisoned chalice for the lower courts.

Section 301: A Slower but Court-Proof Weapon

USTR Jamieson Greer, in a statement released the very day of the Supreme Court’s ruling, laid out the path for reinstating tariffs: launching new investigations under Section 301 on an accelerated timeline. This section of the 1974 Act requires a formal process—investigation, public consultation, and a hearing—but it is immune to the legal challenges that brought down the IEEPA. The Section 301 tariffs imposed on China since Trump’s first term have never been overturned. It is this robust legal model that Washington now wants to apply to Brasília.

The specific investigation into Brazil was launched on July 15, 2025, at the direction of President Trump. It already focused on the six areas mentioned above. The June 2026 ruling is therefore the conclusion of a process that began a year earlier, and its publication comes precisely as the administration seeks to rebuild its trade arsenal on a more solid legal foundation. This is no coincidence: it is a strategy.

Credit where credit is due: procedurally speaking, Section 301 is infinitely more robust than the IEEPA. The Trump administration has learned a painful lesson from its early years. But a more legally sound weapon is not necessarily a fairer one, and procedural legitimacy cannot mask the political motivations evident in the choice of targets.

The USTR's Six Grievances Against Brasília: Fact and Pretext

A motley array of accusations that blur the lines between legitimate and political concerns

The USTR based its determination on six categories of Brazilian practices deemed unreasonable. Some of these allegations deserve to be taken seriously. The issue of unfair preferential tariffs—with Brazil applying tariff schedules that disadvantage U.S. goods relative to those of certain partners—is a legitimate trade grievance. The same applies to certain aspects of intellectual property protection and access to the ethanol market, where Brazil has imposed an 18% tariff on U.S. ethanol imports since 2023.

But other accusations are frankly political. The issue of enforcing anti-corruption laws is notoriously vague: no country is normally subject to trade tariffs simply because its judicial system is not effective enough in combating domestic corruption. This is a transparent pretext for targeting a left-wing government whose prosecutions of former President Jair Bolsonaro—an ally of Trump’s who was accused of attempting a coup in January 2023—deeply irritate the White House. The two rationales—commercial and political—coexist in this case without ever being clearly separated.

Pix: When a National Payment System Becomes a Trade Weapon

Perhaps the most revealing aspect of the U.S. accusation concerns Pix, the Brazilian instant payment system developed by the Central Bank of Brazil. According to the Atlantic Council, the word “Pix” appears more than twenty times in the USTR’s determination—making this one of the first cases in the history of trade law where a national payment system is treated as an unfair trade practice under Section 301. Pix processes $6.7 trillion in annual transactions and is expected to account for half of Brazil’s e-commerce by 2028.

The U.S. argument: Brazil’s Central Bank acts as both the regulator of the payments market and the owner-operator of Pix, creating a structural conflict of interest that puts U.S. companies such as Visa, Mastercard, and PayPal at a disadvantage. Brasília counters that Pix promotes financial inclusion and is subject to non-discriminatory rules. This debate is not trivial: as the Atlantic Council notes, if this logic applies to Brazil, it could very quickly apply to the digital euro being developed by the European Central Bank.

The Pix issue deeply troubles me, and I’ll explain why. I understand that U.S. payment companies view a public competitor benefiting from mandatory distribution with suspicion. But turning this commercial concern into a tariff complaint under Section 301 opens a loophole through which every central bank in the world that develops a national payment infrastructure could one day find itself subject to a U.S. investigation. This is a dangerous extension of U.S. trade law into the monetary sovereignty of nations.

The Bolsonaro Factor: Tariffs as a Tool for Political Revenge

Trump, Bolsonaro, and the Memory of January 8, 2023

To fully understand the chosen target, we must look back at history. On January 8, 2023, supporters of former Brazilian President Jair Bolsonaro stormed the National Congress, the Presidential Palace, and the Supreme Court in Brasília—a Brazilian echo of January 6, 2021, in the United States. Bolsonaro, who was in exile in Washington at the time, was the symbol of the populist right that Trump considers his global political family. The legal proceedings initiated by the Lula administration against Bolsonaro for attempted coup d’état infuriated the White House.

As early as July 2025, Trump had explicitly linked the tariffs to the witch hunt against his Brazilian ally, announcing a 50% tariff on Brazilian imports—the highest ever announced against any country—and openly stating that it was a response to the attacks against Bolsonaro and against freedom of speech. The Brazilian Supreme Court has also declared Bolsonaro ineligible to run for office until 2030, depriving him of any chance of electoral revenge in the October 2026 presidential election.

The Section 301 Retaliation: Same Target, New Weapon

With the IEEPA’s repeal, Washington had to find a new legal vehicle to maintain pressure on Brasília. Section 301 offers this possibility, but it requires an economic veneer. The grievances must be commercial, not political. That is why the June 2026 dossier presents accusations carefully phrased in commercial language: unreasonable practices, a burden on U.S. trade, and discrimination against U.S. companies. The political dimension is real but is kept out of the open.

Brasília fully understood the maneuver. The Brazilian government assessed that the points deemed non-negotiable by Washington include precisely those issues that encroach on Brazilian sovereignty: Pix, and Brazil’s trade agreements with China and Mexico. Brasília categorically refuses to terminate its treaties with other countries to satisfy U.S. demands. According to the Brazilian website Metrópoles, sources close to the Planalto Palace acknowledged as early as mid-June 2026 that they saw little chance of preventing the 25% tariff from taking effect.

What annoys me about this situation is precisely this obfuscation. If Washington has legitimate trade grievances against Brazil—and it does have a few—it should articulate them honestly, without mixing them with political retaliation over Bolsonaro’s fate. This blurring of lines does no one any favors: it undermines the credibility of U.S. trade policy, strengthens Lula’s position on the domestic political stage, and pushes Brasília toward Beijing. Trump is sometimes a necessary evil for reining in partners who have become too complacent. But in this case, we’re dealing with a counterproductive excess.

The Paradox of the U.S. Trade Surplus in the Face of Tariffs

Washington Punishes a Country with Which It Has a Trade Surplus

One of the most striking aspects of this issue is often overlooked in the American debate: the United States has a trade surplus with Brazil. As early as June 2, 2026, The Boston Globe pointed out that Washington was proposing 25% tariffs despite a positive trade balance. The Brazilian government itself has highlighted this, noting that the average tariff Brazil applies to U.S. imports is 2.7%—a level that in no way justifies the accusation that U.S. companies are at a disadvantage in accessing the Brazilian market.

The USTR’s rationale lies elsewhere. The issue is not a trade deficit to be corrected, but a comprehensive program to rebuild the U.S. tariff wall under a legal framework that can withstand court challenges. Brazil is a prime target: large enough to serve as an example (the world’s 10th-largest economy), politically entangled enough in sensitive issues to justify escalation, and dependent enough on the U.S. market to feel the pressure. High-stakes Brazilian products—such as steel and semi-finished iron products, which are projected to account for $3.36 billion in exports to the United States by 2025—are precisely the targets of the new measures.

More than 1,200 exemptions: Washington’s strategic generosity

Washington isn’t shooting itself in the foot either. The proposed 25% tariff is accompanied by a list of exemptions covering more than 1,200 classifications in the Harmonized Tariff Schedule, plus some 430 tariff lines related to the aerospace industry. In practice, Brazilian beef, coffee, orange juice, certain minerals and rare earth elements, Embraer aircraft, and petroleum products—all items that the United States cannot afford to stop importing without economic pain—are exempt.

The law firm King & Spalding noted that the tariff, as proposed, would ultimately exclude more than half of U.S. imports from Brazil. This is therefore not a blanket tariff: it is a targeted pressure tactic, designed to strike where Brazil is vulnerable while preserving key U.S. interests. It is trade surgery, disguised as a declaration of economic war.

There is a certain intellectual honesty in acknowledging the sophistication of the maneuver. Washington isn’t seeking to cut itself off from Brazilian coffee. It’s seeking to hurt Brazil’s intermediate industries—steel, processed aluminum, chemicals—while protecting itself. This is intelligently calibrated protectionism, though that doesn’t make it acceptable in principle.

Lula's Response: Outrage, Resistance, and Diversification

A president who refuses to negotiate like a small country

Lula’s response to the USTR’s announcement was immediate and sharp. In a public statement, he said he had learned the news with indignation and asserted that Brazil could not accept such treatment. In an interview with The New York Times published in July 2025, during the first tariff dispute, Lula had declared: “At no point will Brazil negotiate as if it were a small country facing a large one.” That stance has not changed—if anything, it has grown stronger.

Lula had met with Trump in Washington in May 2026, subsequently expressing some optimism about the future of bilateral relations. Two weeks later, the USTR issued its determination. Brazil’s disillusionment is therefore twofold: diplomatic and personal. According to Agência Brasil, the Brazilian government immediately sought to reach a compromise agreement before July 15, while acknowledging that the two meetings already held with the U.S. side had failed to clarify which points were actually negotiable.

Toward Accelerated Diversification of Trading Partners

Faced with a dead end with the U.S., Brasília is looking elsewhere with renewed urgency. China has been Brazil’s leading trading partner since 2009, and recent tensions with Washington are only accelerating this shift in balance. Wang Yi, China’s foreign minister, stated during a call with Celso Amorim, a Brazilian presidential adviser, that Beijing firmly supports Brazil in its defense of national sovereignty and opposes unfair tariffs. The Chinese Embassy in Brasília posted on X: “Unity is strength.”

The EU-Mercosur agreement, long stalled by European resistance—particularly from France—is gaining new momentum in this context. Economists and analysts see the U.S.-Brazil standoff as an opportunity to accelerate the conclusion of a South American transatlantic treaty. Brazil will hold the G20 presidency in 2025, and Lula has every interest in positioning himself as a leader of the Global South who unilaterally challenges U.S. protectionism.

Where Trump believes he is weakening Lula, he is actually strengthening him. This is one of the most striking ironies of this trade policy. Brazilian polls published after the first tariff escalations in the summer of 2025 showed a spectacular rebound in Lula’s approval ratings, which had hit an all-time low before the crisis. By seeking to punish a left-wing government, Washington has provided that government with exactly the nationalist momentum it needed for the October 2026 presidential election. This is a gross strategic blunder.

Rebuilding the Tariff Wall: Strategy and Timeline

Section 122, Section 301, Section 232: The Three Pillars of the New Regime

Following the collapse of the IEEPA, the Trump administration implemented a three-tiered tariff structure. Section 122 of the 1974 Act provided the immediate safety net: a blanket 10% tariff applicable through July 24, 2026, with a statutory cap of 15% and a maximum duration of 150 days. This transitional tariff expires just as the new Section 301 measures—including the Brazilian tariff—are set to take effect. The timing is no accident: Washington wants a seamless transition in customs revenue.

Section 232, which covers national security and allows for tariffs on steel, aluminum, copper, and automobiles, was never affected by the Supreme Court’s ruling. It remains fully in effect. Treasury Secretary Scott Bessent himself had promised that the combination of Sections 122, 232, and 301 would yield tariff revenues virtually unchanged from the IEEPA era. This is a promise of continued economic pressure amid legal restructuring.

A Global Agenda, Not an Isolated Target on Brazil

It would be simplistic to view the proposal against Brazil as an isolated act. During the same period, the USTR launched Section 301 investigations targeting 16 economies for industrial overcapacity and 60 economies for failing to adequately combat forced labor—including Brazil, which also faces a potential additional tariff of 12.5% on this basis, bringing the possible cumulative rate to 37.5%. This overall tariff escalation is systemic: the goal is to rebuild, under Section 301, the tariff structure that the IEEPA had established but which collapsed under the rulings of the courts.

BDO USA noted this in an analysis published on June 19, 2026: Brazil’s proposed 25% tariff, although framed as a blanket tariff on all goods, is in fact narrower in scope than previous IEEPA measures due to the breadth of exemptions. What seems striking on paper is less devastating in practice—but the political signal remains intact.

What worries me most about this comprehensive tariff restructuring is its systematic nature and its likely resilience to future legal challenges. Section 301 has withstood all challenges regarding China since 2018. If the Trump administration succeeds in building a Section 301 tariff wall as solid as the anti-China wall, we will enter an era of lasting American protectionism that will reshape global trade for a decade.

The Challenges for Hemispheric Relations: Beyond Brazil

Latin America Faces a New Monroe Doctrine on Trade

The offensive against Brasília is part of a broader vision of Trump’s policy toward Latin America. Since the start of his second term, he has stepped up interventions in the region’s affairs: military pressure on Venezuela, a strengthened U.S. presence in the Caribbean, and support for right-wing governments in the region. Lula, a leading figure of the Latin American left, embodies opposition to this vision. Launching a trade offensive against Brazil also sends a message to the entire region: fall in line, or pay the price.

This new trade-based Monroe Doctrine undermines the hemisphere’s multilateral frameworks. The World Trade Organization (WTO)—which Brazil, incidentally, brought a case before during the first wave of tariffs in the summer of 2025—is deliberately circumvented by the Section 301 framework. Washington does not need Geneva’s approval to impose its tariffs: it need only ensure that its own administrative process is followed. This erosion of global trade governance is as troubling as the tariffs themselves.

The Temptation of the Global South and the Decline of U.S. Influence

The numbers speak for themselves. According to data cited by the Atlantic Council, Brazilians’ confidence in China as the world’s leading economic power rose from 30% in 2023 to 36% in 2025, while confidence in the United States fell from 42% to 40% over the same period. At the same time, 63.2% of Brazilians held a negative view of Trump following the initial tariff escalations. This is not an isolated incident: it is a structural trend that is eroding U.S. influence in its own hemisphere.

Brazilian presidential adviser Celso Amorim told the Financial Times that Trump’s criticism is, paradoxically, strengthening Brazil’s ties with the BRICS nations. This is exactly the opposite of what Washington is trying to achieve. By seeking to punish Brasília for its alliances with Beijing, Washington is actually pushing Brasília even further into Beijing’s arms. This is a counterproductive feedback loop that should alarm anyone who truly cares about Western influence in the hemisphere.

I am deeply pro-West. I believe the West must remain the center of gravity for a well-ordered world, human rights, and liberal democracy. And that is precisely why this trade policy toward Brazil concerns me: it undermines what we seek to defend. Every point of popularity that Trump gains for Bolsonaro in Brazil is one point lost for Western influence within the world’s 10th-largest economy—a country of 215 million people that will go to the polls in eighteen months.

The Issue of Deforestation: Legitimate Concerns, Obvious Exploitation

An environmental argument from an anti-environmental administration

The argument regarding illegal deforestation is perhaps the most revealing of the contradictions in this case. The USTR has determined that Brazil’s practices regarding illegal deforestation are unreasonable and impose a burden on U.S. trade. This wording makes it possible to raise an environmental complaint within the framework of a trade proceeding. In substance, deforestation is a real problem—but it declined dramatically under the Lula administration, as data from the Brazilian Ministry of the Environment clearly show for May 2026.

In contrast, the Trump administration has systematically dismantled U.S. environmental protections since 2025: withdrawing from the Paris Agreement, weakening the Environmental Protection Agency, and promoting fossil fuels. Citing Brazilian deforestation as a trade justification from a position of U.S. environmental neglect amounts to pure exploitation. Lula himself said it plainly: he would prove the United States wrong by presenting official deforestation data.

The risk of setting a precedent: when everything becomes a trade weapon

The Brazilian case opens a Pandora’s box in international trade law. If a country’s digital payment policy, deforestation, and enforcement of anti-corruption laws can be subject to a Section 301 determination, then virtually any domestic policy of a trading partner can be turned into a tariff complaint. This is a destabilizing expansion of U.S. trade law into areas of national sovereignty.

The Atlantic Council highlighted this in its June 12, 2026, analysis on Pix: U.S. action against the Brazilian payment system should set off alarm bells in Brussels, which is developing the digital euro on a similar public infrastructure. If this precedent is upheld, every central bank developing a national payment solution could one day find itself the target of a U.S. Section 301 investigation. This would amount to the forced privatization of the global monetary infrastructure for the benefit of major U.S. financial platforms.

This Pix precedent strikes me as the most dangerous aspect of this entire issue, and it’s the one people talk about the least. This isn’t about a tariff on coffee or soybeans—it’s a signal sent to any government in the world that dares to build a national public digital infrastructure: do it, and you risk a U.S. trade investigation. It’s a new form of financial colonialism that must be clearly named.

The Real Economic Impact: Who Actually Pays the Rates?

Brazil’s manufacturing industries on the front lines

The list of exemptions reveals which products will actually be affected. With the main raw materials exempt—coffee, beef, oil, rare earths, and Embraer aircraft—it is primarily processed goods and intermediate industrial goods that would remain subject to the 25% tariff. Semi-finished iron and steel products, for example, accounted for $3.36 billion in Brazilian exports to the United States in 2025. These are also high-value-added and labor-intensive industries in Brazil.

It is important to remember—and this is a fact often overlooked in the U.S. debate—that import tariffs are, in reality, taxes on U.S. importers and, ultimately, on U.S. consumers. The Goldman Sachs analysis cited during the crisis of the summer of 2025 had estimated the effective tariff rate on Brazilian exports to the United States at approximately 30.8%, due to numerous exemptions. If the 25% Section 301 tariff is combined with other existing duties, certain Brazilian industrial sectors could face a tariff wall of 37.5%—a level that would make their exports to the United States virtually uncompetitive.

A U.S. Trade Surplus Despite Everything: An Openly Admitted Inconsistency

As noted by Agência Brasil, the Brazilian government has put forward a stinging argument: the United States runs a trade surplus with Brazil. In terms of the pure balance of trade, Washington therefore has no deficit to correct with Brasília. Trump’s traditional argument—that tariffs are a response to U.S. trade deficits—does not hold up here. The USTR itself has sidestepped this awkward problem by basing its grievances not on the overall trade balance, but on sector-specific practices deemed unfair.

This sector-specific approach is actually more sophisticated—and potentially more sustainable—than the blanket reciprocal tariffs of 2025. It allows Washington to maintain asymmetric pressure—striking where Brazil is vulnerable, protecting itself where it is indispensable—while benefiting from a solid legal basis. This is precision coercive trade, and Brazilian companies in the targeted sectors are under no illusions about what awaits them if negotiations fail before July 15.

There is a biting irony in seeing Washington punish a trading partner with which it runs a surplus. I do not deny that sector-specific grievances may be legitimate regardless of the overall trade balance. But when Section 301 is used against a country with which one has a positive trade balance, it sends a signal to other trading partners: a trade surplus does not protect you, nor does loyalty; only capitulation works. This is a dangerous doctrine for the global trading order.

Europe's stance on this precedent

Brussels is watching; the digital euro is indirectly in its sights

The Brazilian case isn’t just a matter for the Americas. Brussels is following these developments with growing concern. The European Central Bank is developing the digital euro—described by Executive Board member Piero Cipollone as “a digital equivalent of banknotes,” a public infrastructure on which private companies can build services. This description bears a striking resemblance to the Pix model. If the USTR can treat Pix as an unfair trade practice, the digital euro could one day find itself in the same crosshairs.

The Atlantic Council notes that the ECB has invoked payment sovereignty since 2019, developing a pan-European payments strategy in response to the continent’s dependence on non-European systems—approximately 61% of card transactions in the eurozone in 2022 used international card systems. Thirteen eurozone countries were entirely dependent on these foreign systems. The rationale for monetary independence is sound—but it is now vulnerable to U.S. trade sanctions if the Pix precedent is upheld.

India and the Temptation of a Coalition of National Payment Systems

Brazil is not alone in this situation. India’s Unified Payments Interface—fast, low-cost, and backed by account-to-account transfers—is drawing similar attention from U.S. officials. The USTR’s National Trade Estimate 2026 report notes that India’s electronic payment policies appear to favor domestic providers at the expense of foreign ones. The logic is the same. If Pix is objectionable, UPI may be as well.

This U.S. approach risks provoking exactly what Washington fears most: a coalition of emerging powers seeking to build financial architectures as alternatives to the dollar and U.S. platforms, thereby accelerating the fragmentation of the international monetary system. China, Brazil, India, and potentially Europe could find themselves on the same defensive front against the imperialism of U.S. payment platforms—a geopolitical alliance that Washington would struggle to manage.

I’ll be blunt: the issue of payment sovereignty is one of the most important of the coming decade, and it goes far beyond the trade dispute between Washington and Brasília. The West cannot claim to defend national sovereignty while imposing the commercial dominance of its own financial platforms. This is contradictory—and dangerous. Trump is wrong on this point, and Europe should state this clearly rather than remain silent.

The 2026 Brazilian Election in the Shadow of Tariffs

U.S. Pressure as Fuel for Lula’s Campaign

Brazilian President Lula da Silva has already announced that, if necessary, he would run for a fourth term in the October 2026 presidential election. His approval rating had hit an all-time low in early 2025—before Washington’s tariff threats sparked a “rally around the flag” effect. According to Atlas/Bloomberg data published in July 2025, following the first wave of tariffs, Lula’s approval rating had surpassed his disapproval rating for the first time since October 2024: 50.2% approval versus 49.7% disapproval.

The July 2025 Genial/Quaest poll showed a rise to 43% approval, up from 40% in May. Most importantly, 61% of Brazilians believed that Lula represented Brazil better than Bolsonaro on the world stage—up from 51% in November 2023. Paradoxically, U.S. tariffs have reinforced the Lula narrative: a sovereign Brazil, standing firm in the face of intimidation from the North.

Bolsonaro Sidelined, Lula in Control

The Brazilian Supreme Court has declared Bolsonaro ineligible to run for office until 2030, for abuse of political power and manipulation of the media. His ally Trump may well wield tariffs in retaliation—but that will not change the Brazilian court’s verdict. The trial for attempted coup d’état continues regardless of pressure from Washington, and Lula emerges from it with a strengthened image as a defender of democratic institutions.

This political dimension is key to understanding why the Trump administration is stuck in a strategic dead end in Brazil. Tariffs do not exonerate Bolsonaro. They do not suspend legal proceedings. They do not change the 2022 election outcome. On the contrary, they give Lula exactly what he needs for the 2026 election: a powerful external enemy, a narrative of national resistance, and enhanced international legitimacy.

What baffles me is the apparent inability of the Trump strategy to grasp this dynamic. Using trade tariffs to influence a sovereign judicial process in a potential ally’s country is not only ineffective—it’s counterproductive. Every tariff threat strengthens Lula, undermines U.S. influence, and pushes Brazil toward China. This isn’t foreign policy—it’s U.S. domestic politics disguised as diplomacy.

The Critical Timeline: From July to the Summer of 2026

A tight schedule that leaves little room for compromise

The timeline for this trade dispute is clear. The formal investigation was launched on July 15, 2025. The USTR’s determination was published on June 1, 2026. Written comments from interested parties were due by July 1, 2026. Requests to testify at the public hearing were due by June 22, 2026. The USTR’s official public hearing is scheduled for July 6, 2026. And the legal deadline for the USTR to issue a final decision is July 15, 2026—exactly one year after the investigation was launched.

This extremely tight timeline leaves Brazil very little time to negotiate an agreement. Officials at the Planalto Palace themselves acknowledge that negotiations have stalled, as the Americans have not clarified which points are actually negotiable. Certain issues—PIX, Brazil’s trade agreements with China and Mexico—are considered non-negotiable not only by Washington but also by Brasília, which refuses to terminate its treaties with other partners to satisfy unilateral U.S. demands.

Two Scenarios Starting July 15

Starting July 15, 2026, two scenarios are taking shape. In the first, Trump decides to finalize the 25% tariff—possibly combined with the additional 12.5% tariff related to forced labor, bringing the total to 37.5%. Brazilian manufacturing industries suffer a direct blow, bilateral relations plummet, and Brasília intensifies its geopolitical diversification toward China and the European Mercosur. In the second scenario, a last-minute agreement is reached—perhaps in the form of symbolic Brazilian concessions on a few technical issues such as ethanol or intellectual property—allowing Trump to declare victory.

According to sources close to the Planalto Palace cited by Metrópoles and Poder360 in mid-June 2026, the second scenario is considered unlikely. The Brazilian government sees no flexibility on the U.S. side and believes the tariffs will likely be finalized. This Brazilian pessimism is not resignation: it is a sober assessment of the balance of power and the U.S. political calendar, where an agreement with a left-wing Latin American government offers Trump no electoral dividends.

If I had to bet, I’d wager that the tariffs will be finalized. Not because it’s the best decision for long-term U.S. interests—it isn’t—but because Trump has no incentive to give Lula a political gift eighteen months before the Brazilian election. The logic of punishment takes precedence over the logic of compromise. That is what makes this case so troubling: it is not driven by commercial reasoning, but by political revenge.

Conclusion: A trade retaliation that misses its political mark

The Paradox of a Weapon That Strengthens Its Opponent

The USTR’s proposed 25% tariff against Brazil is, in many ways, a show of force that backfires on its author. Legally sound, thanks to Section 301, which stands up in court, it achieves its goal of causing economic harm to certain Brazilian sectors. But politically, it gives Lula exactly what he needed: a credible enemy, a national cause, and a narrative of sovereignty that rallies the people. Brazilian polls have shown this with every escalation: U.S. pressure boosts the Brazilian president’s popularity.

In terms of hemispheric relations, the picture is even bleaker. Every U.S. tariff imposed on Brazil is an invitation to Beijing to consolidate its presence in the Brazilian economy. China has not missed the opportunity—Wang Yi said so explicitly. Brazil is exploring the EU-Mercosur agreement with renewed enthusiasm. The BRICS nations are closing ranks. And U.S. influence in its own hemisphere is waning as resentment builds.

The West does not gain by punishing its potential allies

We must tell the truth, even if it is uncomfortable: Brazil is not an enemy of the West. It is a democracy of 215 million people, a leading economy, and an indispensable partner for the energy transition—in terms of rare earths, bioethanol, and agri-food. Treating Brasília as an adversarial economy simply because its president is left-wing and because he respects the rulings of his courts is a fundamental mistake. Trump, as a necessary evil for recalibrating certain unbalanced trade relationships, may be defended on other issues—but not on this one.

The West will not strengthen its center of gravity by turning its natural partners in the Global South into reluctant adversaries. The real threat to the ordered world is China, Russia, and their allies—not a Brazil that holds elections, condemns coups, and seeks to trade with everyone. Every dollar in tariffs imposed on Brasília is a windfall for Beijing. This calculation, apparently, has not yet convinced the White House.

By Maxime Marquette, columnist