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trade
Trump’s Bizarre, Authoritarian, Big, Tech-Friendly Tariffs on Brazil
Trump’s social media post outlines three ostensible reasons for the imposition of such high tariff rates. First, the supposed “Witch Hunt” against his friend Jair Bolsonaro, the right-wing former president of Brazil, who is currently being prosecuted for allegedly initiating a coup following his electoral loss in 2022. Second, recent rulings by Brazil’s Supreme Court have sought to cast greater responsibility for content moderation on social media companies. And, third, a supposed trade deficit with Brazil caused by “many years of Brazil’s Tariff, and Non-Tariff, Policies and Trade Barriers.” However, a cursory analysis of these reasons makes it clear that Trump’s actions are not motivated by any real economic or legal factors, but are instead about pushing his authoritarian agenda and doling out favors to Big Tech companies and other corporate cronies.
President Trump, given his predilection for authoritarian strongmen, has long supported Brazil’s controversial ex-president Jair Bolsonaro, described by some as the “Trump of the tropics.” Notably, Trump hosted Bolsonaro in the White House in 2019, while also endorsing his run for reelection in 2021 and 2022, describing him as “one of the great presidents of any country in the world.” Importantly, however, Bolsonaro, in addition to sharing a scant regard for human rights, also embraced a “strongly neoliberal agenda” during his time in office, initiating many regulatory actions that mirror Trump’s in the U.S., such as weakening environmental protections, gutting labor regulations, and the like. In contrast, Brazil’s current President Luiz Ignacio Lula de Silva has been vocal in calling out Israel’s war on Gaza, while also seeking to strengthen BRICS—something President Trump is not particularly happy about, given the broader geostrategic challenge this represents to the U.S.
Bolsonaro is currently on trial in Brazil for allegedly instigating a coup that led to violent mobs seeking to take over critical institutions following his loss in the 2022 national elections. Trump appears to see parallels in the case against Bolsonaro with the January 6 insurrection of 2021. Trump’s seemingly blatant interference with domestic political and judicial processes has been strongly condemned by President Lula, who quite rightly insists that Brazil’s sovereignty must be respected.
The second reason cited by Trump pertains to Brazil’s recent attempts at regulating the digital ecosystem in the public interest. Brazil has been at the forefront of countries seeking to find new models of regulation for the digital economy. U.S. Big Tech companies hate Brazil’s proposals to implement a network usage fee and a new digital competition law. It also recently enacted a privacy law that has been called out in an annual U.S. government report that lists supposed non-tariff trade barriers (together with privacy laws in a number of other jurisdictions, such as the E.U., India, Vietnam, etc). This report, which Trump waved around at his April 2 tariff announcement event, is essentially “Project 2025” for trade policy.
It’s clear that the Trump administration will continue to threaten tariffs to countries around the world for standing up for their people’s rights on behalf of his billionaire buddies.
More pertinently, Brazil has been engaged in a standoff with a number of social media companies over the last few years, particularly given the problems of misinformation linked to Brazil’s last election cycle. A number of studies demonstrate how the use of misinformation was widespread during Brazilian elections over the last few years, with Bolsonaro supporters in particular said to have been targeted by propaganda. Brazil’s state institutions have been grappling with how best to address this maelstrom of misinformation, including by threatening to ban X, also known as Twitter, for failing to comply with domestic laws.
More recently, however, Brazil’s Supreme Court has ruled that social media companies have a responsibility to police their platforms against unsafe or illegal content. This goes directly in the face of a model the U.S. has long sought to propagate through the rest of the world—one that replicates its laissez-faire attitude to social media regulation under Section 230 of the Communications Decency Act. American law provides a “safe harbor” to platforms for carrying illegal user content, arguably reducing the incentive for social media companies to regulate illicit content (while others argue that the provision reduces privatized censorship). There has been a rigorous debate around Section 230 even in the United States, while a number of countries have or are seeking to move away from this model, as the scale of harm that can be caused by social media becomes more apparent and real. This threatens the profits of big companies such as Meta and X. By directly linking the imposition of tariffs to Brazil’s attempts at regulating social media, Trump is merely helping out his billionaire tech-bro buddies—part of his shakedown on behalf of Big Tech.
We have seen similar demands aimed at a number of countries that are seeking to regulate the digital ecosystem. For example, a number of digital regulations in the E.U., such as the General Data Protection Regulation, Digital Services Act, and Digital Markets Act, are reported to be under threat in trade negotiations between the U.S. and the E.U. Trump also recently strong-armed Canada to revoke its Digital Services Tax under threat of suspending trade negotiations. The tax was estimated to cost Big Tech companies in the region of CAD 7.2 billion over five years.
Most laughably, Trump reproduces language used in tariff letters sent to a number of other countries, claiming that he needed to impose the 50% tariff as Brazil has a trade deficit with the U.S. As pointed out by numerous analysts, this is patently wrong. The New York Times notes that “for years, the United States has generally maintained a trade surplus with Brazil. The two countries had about $92 billion in trade together last year, with the United States enjoying a $7.4 billion surplus in goods.” Brazil was even not on Trump’s own list for higher “reciprocal tariffs” announced in April, as the data published by the USTR noted the U.S. trade surplus with Brazil. Trump’s justification for enacting so-called “reciprocal” tariffs on dozens of countries was that their trade deficits with the U.S. constitute an emergency, granting him sweeping powers. This claim has been rejected by a federal court, with appeals still underway. Brazil’s lack of any deficit, let alone an emergency-justifying one, makes these tariffs on Brazil even more legally questionable.
Trump’s letter to Brazil announcing the new tariffs. Highlighted text was present in the form of letters sent to more than a dozen other countries.
So, what are Trump’s real motivations for the imposition of these tariffs on Brazil? As indicated above, he is clearly enamoured of Bolsonaro, while he hasn’t been shy of hiding his dislike for Lula. In addition to helping out his authoritarian buddy, Trump is also clearly seeking to repay Big Tech, significant contributors to his inauguration fund. As we have pointed out previously, Trump’s trade policy has essentially been a scheme to bully countries into deregulation, particularly in the tech space. This also accords with the longstanding U.S. policy to see to it that its digital companies are not regulated by foreign countries.
Looking ahead, things are as unclear as they have always been through the course of Trump’s second term in office. While the tariffs on Brazil are scheduled to go into effect this August, Trump appears to have kept the door open to further negotiations. Barring a diplomatic resolution, the USTR’s S 301 investigation will likely find that Brazil created an unjustifiable burden or restricted American interests, though this could take some time. Such a determination could lead to the imposition of new (more legally sound) tariffs or be used to justify the already announced tariffs against Brazil.
Brazil, meanwhile, has already enacted an Economic Reciprocity law that will allow it to take retaliatory action against the U.S., including by imposing tariffs, suspending commercial concessions and investments, and obligations pertaining to intellectual property rights. It would appear that the Brazilian government is prepared to take steps to protect its sovereignty, though it will also be motivated by the need to ensure continued exports to the U.S., which is an important market for a number of Brazilian products, such as energy, aircraft and machinery, and agricultural and livestock products.
While it is difficult to predict what is likely to happen in the days and months ahead, it’s clear that the Trump administration will continue to threaten tariffs to countries around the world for standing up for their people’s rights on behalf of his billionaire buddies. The question, however, remains: Will countries stand up to Trump’s bullying and instead protect their sovereign right to regulate in the public interest and will Congress hold him accountable for his con on American workers?
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