Following the 17th BRICS Summit in Rio de Janeiro, relations between Brazil and the United States have significantly deteriorated. On July 9, U.S. President D. Trump sent an official letter to Brazilian leader Luiz Inácio Lula da Silva, warning of the imposition of 50% tariffs on all Brazilian imports starting August 1, 2025.
Reasons for the Escalation
The current escalation did not happen overnight but has been developing since the very moment of D. Trump’s return to power. Brasília initially treated the new American administration and its protectionist policies with particular caution. Soon, it became obvious that current Brazilian-American relations are significantly influenced by the interpersonal dynamics between Lula da Silva and Trump. The Brazilian leader failed to establish contact with the new U.S. administration.
Lula da Silva had repeatedly criticized Trump and his administration for imposing trade barriers, interfering in Brazil’s internal affairs, the US policy in the Middle East, etc. An additional irritant for Washington was the hosting of the 17th BRICS summit on Brazilian territory, during which Lula da Silva also did not hold back in criticizing Trump for his unfriendly stance toward the member countries of the association.
The Brazilian authorities clearly understand that the imposition of U.S. tariffs is driven not by economic but purely political motives. Washington seeks to ease pressure on the pro-American right-wing opposition and its leaders, which is why it is particularly interested in the fate of former President Bolsonaro, who is under investigation for attempting to organize a coup on January 8, 2023.
It is noteworthy that representatives of the Bolsonaro clan have been trying for several months to persuade the Trump administration to impose sanctions against the Lula da Silva government. The key lobbyists on this issue are Eduardo Bolsonaro, the son of former President Bolsonaro, who has been in the U.S. since February 2025; Paulo Figueiredo, a Brazilian journalist and former business partner of Trump; and Filipe Barros, chairman of the Committee on Foreign Affairs and National Defense of the Brazilian Chamber of Deputies.
All three maintained contact with Republican U.S. Congressmen Cory Mills (Chairman of the Foreign Affairs Subcommittee on Oversight and Intelligence of the House of Representatives) and María Elvira Salazar (Chairwoman of the Foreign Affairs Subcommittee on the Western Hemisphere of the House of Representatives), who have close ties with Secretary of State Marco Rubio.
Mills, Salazar, and Rubio are among those advocating for personal sanctions against members of Lula da Silva’s government, particularly STF Justice Alexandre de Moraes, who oversees the investigation against former President Bolsonaro. However, the situation with the STF justice is far more complex than it may seem at first glance. Moraes is also responsible for regulating social media in the country and monitors the information space for illegal and extremist content.
Moraes’ policies are viewed extremely negatively by major U.S. technology companies operating in Brazil. Corporations such as Google, Meta, Microsoft, Amazon, Uber, Apple, Pinterest, eBay, and others have funded the lobbying group “Computer & Communications Industry Association” (CCIA) to pressure the White House into imposing sanctions against Moraes and revising trade policy with Brazil as a whole. Notably, the CCIA was among the first to welcome the introduction of 50% tariffs.
Brazil’s right-wing opposition, which supports Bolsonaro, expects that following the imposition of tariffs, U.S. sanctions against members of Lula da Silva’s government will follow. Supporters of the Brazilian president, in turn, believe that those advocating for trade restrictions deserve punishment. For example, Lula da Silva’s The Workers’ Party (PT) has stated that it will seek criminal prosecution of Eduardo Bolsonaro, who is considered responsible for the introduction of tariffs.
It is evident that the right-wing opposition’s reaction to the U.S. tariffs will not go unnoticed by the current Brazilian government, and it is possible that this will only worsen their situation in the future.
Will There Be a Response to Washington?
However, there is no unified consensus within Lula da Silva’s government regarding retaliatory measures against the United States. Initially, the president stated that Brazil would respond immediately in accordance with the “Law on Economic Reciprocity” adopted in April 2025, which provides for: increasing import duties; suspending provisions of bilateral trade agreements; terminating recognition of patents and/or royalty payments to foreign companies or citizens; revoking most-favored-nation trade status.
It is evident that Brazil has little interest in retaliating against the United States, as previously noted in the earlier NEO report. On one hand, Brasília has already recognized that blackmail is Trump’s preferred negotiation tactic – giving in to his demands could lead to more severe consequences, with a high risk of escalating into a full-scale “trade war.” On the other hand, the imposed tariffs are politically motivated and form part of a broader U.S. strategy to weaken the central government, which cannot be ignored under any circumstances. It appears that a decision has been made to maintain a wait-and-see approach until August 1.
Several Brazilian experts suggest that the Americans are largely bluffing, and if negotiations prove successful, trade barriers on certain items could be eased, ultimately making them virtually unnoticeable to the Brazilian economy. However, should Washington ultimately decide to maintain the status quo, both sides would face negative consequences. The tariffs would primarily affect Brazil’s Southeast region, home to key export-oriented industries—steel and aviation.
The United States is the main market for Brazilian steel, accounting for about 55% of Brazil’s total steel exports. From January to June 2025, Brazil supplied iron and steel products worth $1.5 billion to the U.S. On the other hand, Brazil is the second most important supplier of raw materials for American rolling mills. Additionally, the country exports about 10,000 tons of steel cord (brass-coated steel wire) monthly, which is essential for reinforcing rubber tires and is not produced in the United States.
The Brazilian aircraft manufacturing conglomerate Embraer will also be among the affected parties, as the United States accounts for about 60% of sales of medium-haul passenger aircraft from the Embraer E-Jet family. Simultaneously, 50-60% of their components are supplied from the United States.
Brazil’s hydrocarbon sector also risks suffering losses. From January to June, crude oil and petroleum products worth $2.37 billion were exported to the United States. At the same time, the largest importers of Brazilian crude oil are American companies Valero and Marathon, whose refineries blend it with shale oil. However, losses are expected to be minor as Brazil’s Petrobras is reducing exports to the U.S. and diversifying supplies. Beef, coffee, orange juice, sugarcane, pulp, and ethanol producers may also face some challenges.
While Brazil does have the capacity to deliver a proportional response, such action would lead to reduced exports, decreased production profitability, and a weakening of the Brazilian real against the US dollar. However, unlike the United States, Brazil possesses the ability to diversify its export markets and minimize potential losses. Nevertheless, Brazilian authorities have no interest in engaging in an open “trade war” with the US and will seek to soften the American position through non-public diplomatic channels.
Thus, the escalation of Brazilian-American relations triggered by the U.S. imposition of high tariffs demonstrates that the conflict is not so much economic as it is political in nature. Washington, acting under pressure from domestic lobbying groups—ranging from Bolsonaro supporters to major technology corporations—is using trade restrictions as a tool to pressure the Lula da Silva administration.
Mikhail Ilevich, junior research fellow at the Centre for Scientific and Analytical Information at the Institute of Oriental Studies of the Russian Academy of Sciences
