Donald Trump’s retreat from imposing an additional 40% tariff on 200 Brazilian agricultural products reflects the validity of the strategy adopted by President Luiz Inacio Lula da Silva and Itamarati in reaction to the Trump tariffs. In July, about 700 more products had already been exempted. Last week, Trump also eliminated the 10% tariff imposed globally on agricultural and other products. The new menu includes beef, coffee and fruit and brings convenience to agribusiness.
It is true that Brazil’s response to the tariffs imposed to pressure the judiciary in the case against Jair Bolsonaro has begun to falter. It took a long time for Lula to send Chancellor Mauro Vieira to the United States, and members of the Workers’ Party had no channels of communication in the Republican government. It also didn’t help that Lula supported Kamala Harris in the presidential campaign. In the first few weeks, he seemed more willing to speak in defense of national sovereignty and criticize Trump than to open channels of communication. Meanwhile, the official Brazilian reaction was sober. The government avoided retaliation, Itamaraty worked to build bridges, and businessmen made their point known to the Americans.
- Trump reduces tariffs on some Brazilian products in the United States: The decision refers to a conversation with Lula, but not Bolsonaro. Read in full
In September, after Bolsonaro had already been condemned, Lula took advantage of the UN General Assembly in New York to have a quick chat with Trump, who had already received complaints from US companies hurt by the tariffs. You succeeded. “Actually, he loved me. I loved him. We had great chemistry,” Trump said.
The incident had two practical consequences. First, it revealed the pantomime of federal representative Eduardo Bolsonaro. For several months spent in the United States fighting against Brazil, he claimed to have unlimited access and influence over White House decisions. What is more, he celebrated the tariffs in an inappropriate manner, indicating that his interests were personal, not national. Reality revealed the illusion. Secondly, and more importantly, the meeting gave momentum to understanding efforts. In early October, Lula and Trump spoke by phone, and twenty days later they met in Malaysia. Meanwhile, Vieira and Foreign Minister Marco Rubio have deepened negotiations, which are still ongoing.
- a job: Even with tariff exemptions, 63% of Brazilian exports to the United States still pay taxes
From the beginning, the situation was favorable for the Brazilians. In contrast to Canada and Mexico, Brazil is not dependent on the US market for exports (only 12% of foreign sales were sent there before the tariffs were imposed), and a large portion of affected exporters have been able to find alternative buyers. Over time, tariffs and restrictions on Brazilian products had a predictable effect on the American economy: they began to fuel inflation. This is the main reason Trump backed down, and it explains why the best thing Brazil could do was wait.
In negotiations, tariff exemptions for industrial products still need to be expanded. It won’t be that easy. In any case, channels of communication are now open, and the biggest impasse in the diplomatic history of both countries has been overcome. For the United States, it was apparently clear that Trump’s pressures never had a chance to influence Bolsonaro’s rule — and that Brazil is not negotiating independence of justice, sovereignty, or a democratic system.
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