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Trump's tariff warning came via a letter on his social media platform, citing the trial of Jair Bolsonaro, the former Brazilian leader and Trump ally. Trump called the trial a "witch hunt" and demanded Brazil end it, warning that steep duties would remain unless his demand was met. (source)
In response, Lula defended Brazil's sovereignty and the integrity of its justice system, stating the country should be "respected" and that "no gringo is going to give orders". (source) He said he at first thought the letter was a fake, and told supporters Brazil would take any necessary measures to defend its people and businesses. (source)
Lula's lawmakers have already passed the Industrial Reciprocity Law, enabling Brazil to impose counter‑tariffs in direct proportion to any U.S. duties. (source) Finance Minister Fernando Haddad urged caution, insisting any trade dispute should be solved through negotiation and diplomacy. (source)
Analysts say the tariff standoff could trigger a wider trade confrontation. Brazil's exports to the U.S. including oil, beef, coffee, and orange juice- could be rerouted to Asia if duties hit, according to Petrobras's CEO, who noted just 4% of Brazil's oil currently goes to the American market.
Observers see political motives behind Trump's action. He has reportedly targeted Brazil partly to support Bolsonaro during his ongoing trial. (source) In Brazil, though, the move has had an unexpected effect: it united wide parts of Brazilian politics around Lula and put pressure on conservatives.
Georgetown trade scholar Marc Busch noted that using tariffs as a lever against another country's judicial process is unusual and highly provocative. He warned that Brazil's reaction, unlike previous weaker responses, could escalate the situation into a different and more serious kind of trade war. (source)
Despite the growing tensions, Lula has extended an olive branch, saying Brazil remains open to dialogue with the U.S. no meetings between Lula and Trump have been scheduled. (source)
The possibility of a renewed Trump administration has already discouraged global markets. Investors are closely watching how countries are responding to his trade proposals. Lula's comments reflect a growing concern among global leaders that the world may be heading toward another period of economic instability if the U.S. adopts a more aggressive stance.
European Union officials, along with trade representatives from countries like Canada, Mexico, and Japan, have also expressed concern about Trump's trade agenda. Some are considering joint responses, similar to what was seen during Trump's first term when tariffs were met with organized retaliation.
"Global trade relies on mutual respect and agreed-upon rules," said Angela Martin, a Brussels-based trade expert. "If Trump abandons that framework again, countries like Brazil are right to defend themselves."
Under Lula's leadership, Brazil has been expanding its role in international trade. The country has deepened its ties with the BRICS group, strengthened partnerships with the European Union, and invested in sustainable development and green technology.
Lula's assertive message to the U.S. reflects this confidence. Unlike in the past, when Brazil may have hesitated to confront a larger economic power, Lula's administration is prepared to stand firm. "Brazil is a sovereign country," Lula stated. "We are no one's backyard. We will respond with strength and dignity."
Brazil has already taken steps to diversify its trade markets to reduce dependence on the U.S. and other traditional buyers. Deals with China, India, and Africa have allowed Brazilian producers to find new homes for their goods. However, the U.S. remains an important partner, making the current threat of trade conflict all the more serious.
Lula's comments are seen as both a warning and a signal that Brazil will not passively accept economic aggression. If Trump wins and carries out his tariff plan, the global economic landscape could shift significantly, and Lula seems prepared to meet the challenge head-on.
Trade experts say both countries should prioritize dialogue over escalation. "There's still time to talk," said Mendes. "The worst outcome would be a full-blown trade war between two of the biggest economies in the Americas."
For now, Brazil is watching and waiting, but with a clear message: it will not stay silent if hit first.
