Trump Targets Copper, Brazil Vows Response to 50% Tariff Threat. Latest Trade News.

President Donald Trump called out Brazil for the trial of its former leader and announced the highest tariffs so far this week on the South American country. (Getty Images)

Brazil’s President Luiz Inácio Lula da Silva fired back at U.S. President Donald Trump late Wednesday, saying he won’t take the imposition of sky-high tariffs lying down.

The South American nation will respond, its leader said in a social media post, citing its own laws on economic reciprocity. It didn’t go into more detail than that. Trump in his letter to Brazil said the trial of its former leader Jair Bolsonaro shouldn’t go ahead. Bolsonaro stands accused of trying to stage a coup against Lula da Silva.

President Trump’s salvo is a major change in the justification for tariffs. It implies the taxes aren’t about reducing deficits—Brazil actually runs a surplus with the U.S. on trade. It may also change the impact on economic growth and inflation.

Instead of the one time impacts the White House and Secretary Bessent promised markets from tariffs, Henrietta Treyz, director of economic policy research at Veda Partners, said there are actually multiple hits in the works, with an ever-expanding agenda.

“From sector-specific national security protections to nationwide tariffs, the president is now exercising his authority to influence other nation’s political policies and agenda,” Treyz said.  The tariff letter to Brazil referring to Bolsonaro’s treatment “is absolutely unprecedented and threatens inflation exponentially,” she said.

Trump said yesterday that Brazil will face a 50% tariff on imported goods to the U.S., the highest rate of any nation announced since he started sending letters to countries laying out the levies they would be paying if they don’t reach a trade agreement by Aug. 1.

Brazilian stocks were falling. The iShares MSCI Brazil exchange-trade fund was down 1.9% in premarket trading after falling 2.3% yesterday.

How Rates are Set

Yesterday Trump said the latest tariff rates are being calculated using a combination of common sense, trade deficits, and how the U.S. has been treated over the years. But the exchange with Brazil suggests Trump also sees tariffs as a tool to influence the policies of foreign countries with which he disagrees.

One optimistic read across is that Brazil’s tariffs don’t mean much for how the rates for others are set.

“There’s no real logic to it other than it being retaliation for Trump seeing Brazil as treating Bolsonaro poorly,” says Owen Tedford, senior analyst at Beacon Policy Advisors.

Plus, Tedford notes the Aug.1 deadline gives Brazil a chance to negotiate the levy. “He is trying to do what he thinks will help his friend. It’s very much a one-off and I wouldn’t read the jump from 10% on April 2 to 50% risk as likely to happen to other countries,” he added.

Copper Crisis

Separately, the president confirmed in a late-night social media post that a 50% tariff on copper imports would start on Aug. 1, citing national security grounds—saying previous presidents, namely Joe Biden, allowed the copper industry to decline. “America will, once again, build a DOMINANT Copper Industry,” he said on his Truth Social site.

Earlier Wednesday, Trump posted letters with new tariff rates for another seven countries, including the Philippines, Algeria, Iraq, Sri Lanka, and Libya. The big question now is what’s in store for the European Union, the 27 nations that collectively trade even more with the U.S. than China. The Wall Street Journal has reported that a deal with the EU is close.

Write to Brian Swint at brian.swint@barrons.com