Lula and Brazil’s Unions Respond to Trump’s Threats
On July 30, US President Donald Trump declared bilateral relations with Brazil a national emergency in order to justify raising import tariffs. In a menacing statement entitled “Addressing Threats to the United States by the Government of Brazil,” he declared:
Recent policies, practices, and actions of the Government of Brazil threaten the national security, foreign policy, and economy of the United States. Members of the Government of Brazil have taken actions that interfere with the economy of the United States, infringe the free expression rights of United States persons, violate human rights, and undermine the interest the United States has in protecting its citizens and companies. Members of the Government of Brazil are also politically persecuting a former President of Brazil, which is contributing to the deliberate breakdown in the rule of law in Brazil, to politically motivated intimidation in that country, and to human rights abuses.
Citing alleged violations of “free speech” – a key element in a false narrative used by the Bolsonaro family to build support for the failed 2022-23 coup attempt – Trump made spurious charges against Alexandre de Moraes, the Supreme Court Justice who oversaw the investigation into the military coup plot which led to the convictions of ex-President Jair Bolsonaro and 32 of his cronies. Moraes, he said, was guilty of abusing his judicial authority “to target political opponents, shield corrupt allies, and suppress dissent.”
As punishment for violating US “free speech” laws and regulating social media corporations to prevent things like school massacres and formation of pedophile rings, Trump announced a 40% tariff increase on Brazilian imports, starting 7 days from the publication of the statement.
Then it got interesting. The statement was issued with an appendix listing hundreds of Brazilian products which will be exempt from a tariff which Trump had initially claimed would be universal, and the rollout date appeared to have been postponed by five days.
This list includes Brazil’s largest export to the US, petroleum and its derivatives, and nearly every product manufactured in Brazil, from airplanes to cars to air conditioners and furniture. The list also exempts steel, iron, all precious metals and, possibly due to a lawsuit by New Jersey-based importer Johanna Foods, Brazil’s 3rd largest agricultural export, orange juice. According to the Brazilian federal government, this list of exemptions represents 43.4% of the nation’s total exports to the US in monetary terms, effectively lowering the average tariff rate on Brazilian goods from a once-threatened 50% to 32.6%. Noticeably absent from the list are the US’ two largest agricultural imports of coffee, which as I wrote last week should not be significantly damaged by the tariffs, and beef, which has lots of other markets to expand to.
On the same day Trump released his statement, the US government invoked the Magnitsky Act against Alexandre de Moraes. It announced it was seizing his US assets and baring his entry to the United States. Moraes calmly replied that he doesn’t have any US assets and – something that may shock the MAGA crowd – is not interested in traveling there. Then he calmly went out to watch a game by his favorite football team, Corinthians.
Justice Moraes at the Corinthians game on the night the US announced its sanctions.
Meanwhile, both President Lula and a coalition of Brazil’s 6 largest labor union federations issued statements repudiating the Trump Administration.
In a press release entitled, “Brazil is a sovereign and democratic nation,” Lula wrote:
In Brazil, the law applies to all citizens and all companies. Any activity that affects the lives of the population and Brazilian democracy is subject to regulations. This is no different for digital platforms.
Brazilian society rejects hate speech, racism, child pornography, scams, fraud, and discourse against human rights and democracy.
The Brazilian government considers it unjustifiable to use political arguments to justify the trade measures announced by the U.S. government against Brazilian exports. Over the past decades, Brazil has accumulated a significant trade deficit in goods and services with the United States. The political motivation behind the measures against Brazil violates national sovereignty and the historical relationship between the two countries.
Trump seems to have issued the statement as a smoke screen to hide the fact that he’s backing down. Bilateral negotiations are ongoing. I believe that in coming days, other products will be added to the exemption list.
Meanwhile, the exemptions are good news for the Lula administration’s ongoing efforts to re-industrialize Brazil. The backlash from Trump’s hostile rhetoric has enabled the left to retake the issue of patriotism. Fickle allies in the business community and center right political parties, which had been increasingly hostile before the sanctions were announced, have veered back towards supporting Lula. Share values for Brazilian aviation giant Embraer, the World’s 3rd largest civilian aircraft manufacturer, surged by 14% yesterday after the tariff exemption was announced. As the backlash against the Bolsonaro family increases, they find themselves more isolated than ever. Meanwhile Lula’s popularity is rising. A recent polls shows he is now the second most popular leader in South America. As for Jair Bolsonaro, he is still under house arrest and wearing an electronic ankle monitor as he awaits sentencing.
This first appeared on De-Linking Brasil.
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