00:00Donald Trump says Brazilian President LuÃs Inácio Lula da Silva can call him any time about the 50% tariffs Washington has imposed on Brazil.
00:09The measures are largely due to Trump's anger at the prosecution of his ally, former President Jair Bolsonaro, on charges of plotting to overthrow the election of Lula in early 2023.
00:22The tariffs are expected to hit Brazilian commodities hard, especially beef, coffee, sugar, steel and aluminium.
00:28But Lula is not budging, and there is no indication he will intervene in the judicial process.
00:36For more on this tiff between Trump and his Brazilian counterpart, I can welcome Anthony Pereira, who is Director of the Kimberley Green Latin American and Caribbean Centre at Florida International University.
00:48Good morning, Anthony, and thank you very much for joining us.
00:50On this tariff row, these tariffs that have been imposed by the Trump administration, who stands to lose more?
00:59Will it be the United States or will it be Brazil?
01:03Well, I think there'll be losses on both sides, because as you said just now, some of these products that will be tariffed at this 50% rate are products that Americans use frequently, like coffee.
01:16So I think there are going to be impacts on both sides.
01:22There really isn't that much room for manoeuvre, I don't think, for the Brazilian government, for the Lula administration, because the main demand, and this was a true social post that was put out there by President Trump on July 9th,
01:37it was mainly about the trial of Jair Bolsonaro, which Lula is not in a position to interfere with.
01:48And so it's very unusual in that sense that it comes out of this projection of President Trump onto the Brazilian scene of his own difficulties with the law because of the alleged attempted insurrection in 2021.
02:02So it's, you know, the likelihood is that Brazil will retaliate with reciprocal tariffs, and President Lula has said he will do that.
02:14But, you know, overall, his popularity and the approval rating of his government have gone up as a result of this.
02:21And Jair Bolsonaro's son, Eduardo, has expressed thanks for the Trump administration's sanctioning of Alexandre de Mouraix, the judge investigating his father.
02:33But it has not been universally welcomed in Brazil.
02:35No, I think the overall effect, the immediate effect of these tariffs, the announcement of these tariffs, has been to marginalize the Bolsonarista movement and make it weaker.
02:48POE, a widely regarded magazine, a sort of monthly magazine of ideas and current affairs, their cover has a list of names of traders on it, including Eduardo Bolsonaro's name.
03:03So it's, there are a lot of people on the central left who are distancing themselves from this kind of action because Eduardo Bolsonaro has embraced the idea that the tariffs are necessary to try to pressure President Lula, the Brazilian Congress.
03:21But many people are saying, well, what kind of nationalism or what kind of patriotism is this if it's these, the people, Eduardo himself is willing to impose suffering on, you know, his fellow countrymen and various economic sectors that are very important to Brazil.
03:39So it's, it's politically sort of, it's ricocheted, if you like, or boomeranged for the Bolsonarista movement, this, these tariffs.
03:49And just turning back to Trump for a moment, Brazil is one of the few countries in the world that the United States actually has a trade surplus with, something that had been true, has been true since 2007.
04:02So is Trump really like cutting off his nose to spice his face effectively in that this is going against his stated objective in imposing tariffs?
04:12And, but he seems to be, has a, have his eye on something else completely here.
04:16Yeah, I think it's very inconsistent with the messaging that we got before.
04:21You remember on Liberation Day, Trump had a big, you know, poster of sort of how big the bilateral trade deficits were between the U.S. and its various partners.
04:30And the tariffs seem to have something to do with that.
04:33This is completely different.
04:35This is a country, you know, Brazil's had a trade deficit with the U.S. in both goods and services for a long time.
04:42And despite that, for this political reason, this rather bizarre political reason to do with the trial, they're getting the biggest tariffs, the highest tariffs of any of the U.S. trade partners.
04:58So it feels, I think the, you know, the shock on the Brazilian side is this is arbitrary, it's capricious, and it, you know, they can't succumb to it.
05:09They have to, they have to maintain their position.
05:13So I think it'll be interesting to see the economic fallout.
05:16I think it's, as you were suggesting there just now, it's likely to be as heavy on the U.S. side as it is on the Brazilian side.
05:24And in the end, you know, this is only 12 percent of Brazil's total exports go to the United States.
05:30So it will be able to weather the storm, I think.
05:34And Donald Trump says that Lula only has to call him, or he can call him.
05:40And Lula is clearly not going to intervene in the judicial process.
05:46But if he were to call Donald Trump, what might Trump expect him to actually come out with?
05:52Will it actually be something more transactional and perhaps make a deal, as Trump likes to say?
06:00Yeah, there might be some room for some transactional negotiation.
06:04You know, the U.S. exports ethanol, for example, to Brazil, and the Brazilians should say, well, we could lower our tariffs on that U.S. product if, you know, sort of reciprocally, because there are a long list of exemptions of Brazilian exports to the U.S. that won't get the 50 percent tariff.
06:28They'll only get the 10 percent.
06:30So there might be some room there.
06:32But there was a Brazilian group of senators that came up last week, and the foreign minister came to the United States, and they didn't get very far.
06:42So that is not very encouraging, that they were not able to make much progress.
06:48Apparently, there was a talk between Foreign Minister Vieira of Brazil and Howard Lutnik, the Commerce Secretary in the United States, but that didn't go particularly well.
06:57So the fact that these delegations weren't able to make inroads doesn't make a possible Trump-Lula conversation that promising.
07:08But, you know, it's always possible, and Trump is very transactional, so there might be some way to diminish some of these tariffs.
07:17Thank you very much for that, Anthony Pereira, Director of the Kimberly Green Latin American and Caribbean Center at Florida International University.
07:24Thank you very much.
Comments